DNA three-way junctions (TWJs) are important intermediates in various cellular processes and are the simplest of a family of branched nucleic acids being considered as scaffolds for biomolecular nanotechnology. Branched nucleic acids are stabilized by divalent cations such as Mg2+, presumably due to condensation and neutralization of the negatively charged DNA backbone. However, electrostatic screening effects point to more complex solvation dynamics and a large role of interfacial waters in thermodynamic stability. Here, we report extensive computer simulations in explicit water and salt on a model TWJ and use free energy calculations to quantify the role of ionic character and strength on stability. We find that enthalpic stabilization of the first and second hydration shells by Mg2+ accounts for 1/3 and all of the free energy gain in 50% and pure MgCl2 solutions, respectively. The more distorted DNA molecule is actually destabilized in pure MgCl2 compared to pure NaCl. Notably, the first shell, interfacial waters have very low translational and rotational entropy (i.e., mobility) compared to the bulk, an entropic loss that is overcompensated by increased enthalpy from additional electrostatic interactions with Mg2+. In contrast, the second hydration shell has anomalously high entropy as it is trapped between an immobile and bulklike layer. The nonmonotonic entropic signature and long-range perturbations of the hydration shells to Mg2+ may have implications in the molecular recognition of these motifs. For example, we find that low salt stabilizes the parallel configuration of the three-way junction, whereas at normal salt we find antiparallel configurations deduced from the NMR. We use the 2PT analysis to follow the thermodynamics of this transition and find that the free energy barrier is dominated by entropic effects that result from the decreased surface area of the antiparallel form which has a smaller number of low entropy waters in the first monolayer.