Annexin V binds to membranes with very high affinity, but the factors responsible remain to be quantitatively elucidated. Analysis by isothermal microcalorimetry and calcium titration under conditions of low membrane occupancy showed that there was a strongly positive entropy change upon binding. For vesicles containing 25% phosphatidylserine at 0.15 m ionic strength, the free energy of binding was -53 kcal/mol protein, whereas the enthalpy of binding was -38 kcal/mol. Addition of 4 m urea decreased the free energy of binding by about 30% without denaturing the protein, suggesting that hydrophobic forces make a significant contribution to binding affinity. This was confirmed by mutagenesis studies that showed that binding affinity was modulated by the hydrophobicity of surface residues that are likely to enter the interfacial region upon protein-membrane binding. The change in free energy was quantitatively consistent with predictions from the Wimley-White scale of interfacial hydrophobicity. In contrast, binding affinity was not increased by making the protein surface more positively charged, nor decreased by making it more negatively charged, ruling out general ionic interactions as major contributors to binding affinity. The affinity of annexin V was the same regardless of the head group present on the anionic phospholipids tested (phosphatidylserine, phosphatidylglycerol, phosphatidylmethanol, and cardiolipin), ruling out specific interactions between the protein and non-phosphate moieties of the head group as a significant contributor to binding affinity. Analysis by fluorescence resonance energy transfer showed that multimers did not form on phosphatidylserine membranes at low occupancy, indicating that annexin-annexin interactions did not contribute to binding affinity. In summary, binding of annexin V to membranes is driven by both enthalpic and entropic forces. Dehydration of hydrophobic regions of the protein surface as they enter the interfacial region makes an important contribution to overall binding affinity, supplementing the role of protein-calcium-phosphate chelates.