The crystal structure of the hydrated Ruddlesden-Popper (RP) phase LaSr3Fe3O8(OH)2·xH2O has been investigated with focus on the orientation of the hydroxide groups and intercalated water. Combined powder synchrotron X-ray and neutron diffraction techniques were used. On the basis of Rietveld refinements and Fourier maps, intercalated water was found to form a network within the rock-salt-type layers of the RP phase with a likely dynamic interchange between different orientations. The water content was determined at different temperatures using thermogravimetric analysis, with findings showing that the water occupation follows a linear temperature dependence. The magnetic properties of LaSr3Fe3O8(OH)2·xH2O are significantly influenced by hydration, but no long-range order was observed. The relationship between the physical properties and crystal structure is discussed in detail.