We investigate the effect of bilayer melting transition on thermodynamics and dynamics of interfacial water using molecular dynamics simulation with the two-phase thermodynamic model. We show that the diffusivity of interface water depicts a dynamic crossover at the chain melting transition following an Arrhenius behavior until the transition temperature. The corresponding change in the diffusion coefficient from the bulk to the interface water is comparable with experimental observations found recently for water near 1,2-dipalmitoyl-sn-glycero-3-phosphocholine (DPPC) vesicles. The entropy and potential energy of interfacial water show distinct changes at the bilayer melting transition, indicating a strong correlation in the thermodynamic state of water and the accompanying first-order phase transition of the bilayer membrane. © 2013 American Physical Society.