We report the first use of terahertz time-domain spectroscopy (THz-TDS) to study the hydration and crystallization of an amorphous molecular solid at high humidity. Lactose in its amorphous and monohydrate forms exhibits different terahertz spectra due to the lack of long range order in the amorphous material. This difference allowed the transformation of amorphous lactose to its monohydrate form at high humidity to be studied in real time. Spectral fitting of frequency-domain data allowed kinetic data to be obtained and the crystallization was found to obey Avrami kinetics. Bulk changes during the crystallization could also be observed in the time-domain. (C) 2013 Elsevier B.V. All rights reserved.