The amide I' band of a polypeptide is sensitive not only to its secondary structure content but also to its environment. In this study we show how degrees of hydration affect the underlying spectral features of the amide I' band of two alanine-based helical peptides. This is achieved by solubilizing these peptides in the water pool of sodium bis(2-ethylhexyl)sulfosuccinate reverse micelles with different water contents or w(0) values. In agreement with several earlier studies, our results show that the amide I' band arising from a group of dehydrated helical amides is centered at similar to 1650 cm(-1), whereas hydration shifts this frequency toward lower wavenumbers. More importantly, temperature-dependent infrared studies further show that these helical peptides undergo a thermally induced conformational transition in reverse micelles of low w(0) values (e.g., w(0) = 6), resulting in soluble peptide aggregates rich in antiparallel beta-sheets. Interestingly, however, increasing w(0) or water content leads to an increase in the onset temperature at which such beta-aggregates begin to form. Therefore, these results provide strong evidence suggesting that dehydration facilitates aggregate formation and that removal of water imposes a free energy barrier to peptide association and aggregation, a feature that has been suggested in recent simulation studies focusing on the mechanism of beta-amyloid formation.