Intrinsically disordered proteins (IDPs) and disordered regions of folded proteins (IDRs) perform a plethora of cellular functions involving interactions with a variety of proteins, DNA, and RNA. Their flexibility enables them to interact with different cellular components. They can adopt molten globule as well as extended statistical coil structures depending on their amino acid residue sequence. They are generally more enriched in polar and charged residues, which generally facilitate solvation. This review article asks to what extent water as a solvent affects local (on a residue level) and global properties (size, Flory exponents) of IDPs. It introduces various aspects of protein hydration in the folded state as a benchmark and reference. The results of experimental and computational studies on short model peptides reveal how local structural propensities of residues are determined by water–backbone and water–side chain interactions. Ramachandran plots of individual amino acid residues are side-chain and neighbor-dependent. For unfolded oligo-peptides and IDPs (IDRs) the article discusses the intricated relationship between IDP hydration and global parameters (i.e., radius of gyration), which involves multiple parameters such as net charge, charge distribution, hydrophobicity, and the ionic strength of the aqueous solution. A review of experimental work that explored the strength of water–protein interactions and their influence on water dynamics reveals significant differences between water binding to folded and disordered proteins. Finally, The role of water in liquid–liquid mixing of short peptides and IDPs is delineated, which can lead to gelation and the formation of membrane-less droplets.