Detailed computational and experimental studies reveal the crucial role that hydrophobic interactions play in the self-assembly of small molecule-DNA hybrids (SMDHs) into cyclic nanostructures. In aqueous environments, the distribution of the cyclic structures (dimers or higher-order structures) greatly depends on how well the hydrophobic surfaces of the organic cores in these nanostructures are minimized. Specifically, when the cores are attached to the 3'-ends of the DNA component strands, they can insert into the minor groove of the duplex that forms upon self-assembly, favoring the formation of cyclic dimers. However, when the cores are attached to the 5'-ends of the DNA component strands, such insertion is hindered, leading to the formation of higher-order cyclic structures. These computational insights are supported by experimental results that show clear differences in product distributions and stabilities for a broad range of organic core-linked DNA hybrids with different linkage directions and flexibilities.