We propose a mechanism for α-helix folding of polyalanine in aqueous urea that reconciles experimental and simulation studies. Over 15 μs long, all-atom simulations reveal that, upon dehydrating the protein's first solvation shell, a delicate balance between localized urea-residue dipole interactions and hydrogen bonds dictates polypeptide solvation properties and structure. Our work clarifies the experimentally observed tendency of these alanine-rich systems to form secondary structures at low and intermediate urea concentrations. Moreover, it is consistent with the commonly accepted hydrogen-bond-induced helix unfolding, dominant at high urea concentrations. These results establish a structure-property relationship highlighting the importance of microscopic dipole-dipole orientations/interactions for the operational understanding of macroscopic protein solvation.