Molecular dynamics simulations of dipalmitoylphosphatidylcholine (DPPC) lipid bilayer/water systems were performed in the presence of dimethylsulfoxide (DMSO) at 2, 5, 10, and 100 mol % DMSO (lipid-free basis). The equilibrium structure and several dynamic properties were determined for these systems. Results show that DMSO penetrates much deeper into the bilayer than water does. It is also found that DMSO molecules do not interact with the polar groups of the lipid headgroup, but exhibit a preference to remain either directly below the headgroup or in the aqueous phase, which is a consequence of the chemical characteristics of DMSO. As the temperature increases, a higher DMSO concentration is observed in the bilayer side of the interface. The area per headgroup in the presence of DMSO is significantly increased from 66.8 A2 for the pure bilayer to as high as 87.0 A2 at 10 mol % DMSO at 350 K. DMSO hydrogen-bonds strongly with water and exhibits unfavorable interactions with the polar headgroups of DPPC, thereby inducing a dehydration of the headgroups.