We compute the entropy and transport properties of water in the hydration layer of dipalmitoylphosphatidylcholine bilayer by using a recently developed theoretical scheme [two-phase thermodynamic model, termed as 2PT method; S.-T. Lin, J. Chem. Phys. 119, 11792 (2003)] based on the translational and rotational velocity autocorrelation functions and their power spectra. The weights of translational and rotational power spectra shift from higher to lower frequency as one goes from the bilayer interface to the bulk. Water molecules near the bilayer head groups have substantially lower entropy (48.36 J/mol/K) than water molecules in the intermediate region (51.36 J/mol/K), which have again lower entropy than the molecules (60.52 J/mol/K) in bulk. Thus, the entropic contribution to the free energy change (TΔS) of transferring an interface water molecule to the bulk is 3.65 kJ/mol and of transferring intermediate water to the bulk is 2.75 kJ/mol at 300 K, which is to be compared with 6.03 kJ/mol for melting of ice at 273 K. The translational diffusion of water in the vicinity of the head groups is found to be in a subdiffusive regime and the rotational diffusion constant increases going away from the interface. This behavior is supported by the slower reorientational relaxation of the dipole vector and OH bond vector of interfacial water. The ratio of reorientational relaxation time for Legendre polynomials of order 1 and 2 is approximately 2 for interface, intermediate, and bulk water, indicating the presence of jump dynamics in these water molecules. © 2010 American Institute of Physics.