Trimethylamine-N-oxide (TMAO) is an osmolyte known for its ability to counteract the pressure denaturation of proteins. Computational studies addressing the molecular mechanisms of TMAO's osmolyte action have however focused exclusively on its protein-stabilizing properties at ambient pressure, neglecting the changes that may occur under high-pressure conditions where TMAO's hydration structure changes to that of increased water binding. Here, we present the first study on the combined effect of pressure and TMAO on a mini-protein, TrpCage. The results showed that at high pressures, nonpolar residues packed less tightly and the salt bridge of TrpCage was destabilized. This effect was mitigated by TMAO which was found to be strongly depleted from the protein/water interface at 1 kbar than at 1 bar ambient pressure, thus counterbalancing the thermodynamically unfavorable effect of elevated pressure in the free energy of folding. TMAO was depleted from charged groups, like the salt bridge-forming ones, and accumulated around hydrophobic groups. Still, it stabilized both kinds of interactions. Furthermore, enthalpically favorable TrpCage-water hydrogen bonds were reduced in the presence of TMAO, causing a stronger destabilization of the unfolded state than the folded state. This shifted the protein-folding equilibrium toward the folded state. Therefore, TMAO showed stabilizing effects on different kinds of groups, which were partially enhanced at high pressures.