The effects of hydration on two types of structural rearrangements, physical aging and crystallization, of poly(lactic acid) (PLA) have been characterized. Although the water absorbed is extremely small, on the order of 0.5% by weight, we found a significant increase in both the magnitude and kinetics of enthalpic relaxation near the glass transition temperature (T-g). The kinetics of aging is at least 2 times the speed as compared to dry samples. In addition, we also found that the crystallization kinetics can be increased significantly when PLA is hydrated. The initial rate of crystallization at 80 degrees C is extremely fast at 7 J/g/min for the hydrated state as compared to 2 J/g/min under dry conditions. However, the ultimate degree of crystallinity achieved is not different for the two types of samples. Both of these structural rearrangements in the hydrated state can be explained by an increase in segmental mobility. The fact that water has such a strong effect on PLA structure is attributed to the strong intermolecular interactions present and their changes in the hydrated state. Spectroscopic features associated with bound water or free water were found for PLA with different hydration levels. The increase in the segmental mobility was directly correlated to the presence of free liquid water disrupting the intermolecular interactions in PLA.