We present an X-ray scattering study of the effects of dehydration on the bilayer and chain-chain repeat spacings of dipalmitoylphosphatidylcholine bilayers in the presence of sugars. The presence of sugars has no effect on the average spacing between the phospholipid chains in either the fluid or gel phase. Using this finding, we establish that for low sugar concentrations only a small amount of sugar exclusion occurs. Under these conditions, the effects of sugars on the membrane transition temperatures can be explained quantitatively by the reduction in hydration repulsion between bilayers due to the presence of the sugars. Specific bonding of sugars to lipid headgroups is not required to explain this effect.