Poly(N-vinylcaprolactam) (PVCL) is a thermo-responsive polymer, which exhibits a lower critical solution temperature (LCST) in an aqueous solution. The LCST of this hydrophilic-to-hydrophobic transition is found to be strongly dependent on the salt-type and salt concentration as well as on the molecular weight and concentration of the polymer. Here, atomistic molecular dynamics simulations have been successfully conducted for the first time to investigate the LCST transition of a 100 degree of polymerization PVCL chain in water, 1 M NaCl, 3.5 M NaCl, and 0.5 M CaCl2 solutions. Our results show that steric hindrance resulting from the bulky 7-member ring on the PVCL chain plays a critical role in the conformational transition. Moreover, the degrees of hydration and dehydration below or above the transition temperature are highly dependent on the specific solution condition and temperature. Water molecules are found to be trapped inside the collapsed polymer chains leading to the varying degrees of hydration and dehydration of the polymer chain in different solutions. Calculated water diffusion coefficients for both trapped and free water molecules agree very well with experimental measurements.