The effect of hydration on the electronic structure of H2O2 is investigated by liquid-jet photoelectron spectroscopy measurements and ab initio calculations. Experimental valence electron binding energies of the H2O2 orbitals in water are, on average, 1.9 eV red-shifted with respect to the gas-phase molecule. A smaller width of the first peak was observed in the photoelectron spectrum from the solution. Our experiment is complemented by simulated photoelectron spectra, calculated at the ab initio level of theory (with EOM-IP-CCSD and DFT methods), and using pathintegral sampling of the ground-state density. The observed shift in ionization energy upon solvation is attributed to a combination of nonspecific electrostatic effects (long-range polarization) and of the specific interactions between H2O2 and H2O molecules in the first solvation shell. Changes in peak widths are found to result from merging of the two lowest ionized states of H2O2 in water due to conformational changes upon solvation. Hydration effects on H2O2 are stronger than on the H2O molecule. In addition to valence spectra, we report oxygen Is core-level photoelectron specfra from H2O2(aq), and observed energies and spectral intensities are discussed qualitatively.