Inclusion complexes between two bile salts and a range of differently methylated beta-cyclodextrins were studied in an attempt to rationalize the complexation thermodynamics of modified cyclodextrins. Calorimetric titrations at a range of temperatures provided precise values of the enthalpies (Delta H degrees), entropies (Delta S degrees), and heat capacities (Delta C-p) of complexation, while molecular dynamics simulations assisted the interpretation of the obtained thermodynamic parameters. As previously observed for several types of modified cyclodextrins, the substituents at the rims of the cyclodextrin induced large changes in Delta H degrees and Delta S degrees, but due to enthalpy entropy compensation the changes in Gibbs free energy, and the binding constant, were much smaller. For the methylated beta-cyclodextrins, the substituent-induced increments in Delta H degrees and Delta S degrees were nonmonotonic with an initial strong increase in both Delta H degrees and Delta S degrees and then a strong decrease when the degree of substitution exceeded some threshold. Exactly the same trend was observed for Delta C-p. The dehydration of nonpolar surface, as quantified by the simulations, can to a large extent explain the variation in the thermodynamic parameters. The methyl substituents form additional hydrophobic contacts with the bile salt, but at high degrees of methylation they also cause significant distortion of the otherwise circular cyclodextrin structure. These two opposing contributions to the dehydration are the major causes for the observed variations in the thermodynamic functions. The structural effects are not expected to be specific for methylated cyclodextrins but should be observed for most modified cyclodextrins. An even more general conclusion is that variations in the extent of hydration are an important underlying reason for the commonly observed phenomenon termed enthalpy entropy compensation and also for the less frequent reports of entropy convergence around 110 degrees C.