We have studied the hydration dynamics of trimethylamine N-oxide (TMAO) in aqueous solution using a combination of concentration-dependent terahertz/far-infrared (THz/FIR) and Raman spectroscopic techniques. Terahertz/FIR absorption was measured using narrowband (76-93 cm(-1)) p-Ge laser and broad band (30-400 cm(-1)) Fourier transform spectroscopy. We used principal component analysis in combination with a semi-ideal chemical equilibrium model to dissect the spectra into linear and nonlinear contributions of the solvated solute extinction. We attribute the linear part to the average extinction and Raman scattering of TMAO-water aggregates with approximately 3-4 water strongly hydrogen bonded to TMAO. An additional nonlinear concentration dependence indicates a decrease of the number of attached water molecules with increasing TMAO concentrations due to a shift in association equilibria. The Raman spectra reveal a frequency shift of the (narrowband) intramolecular vibrations with decreasing dilution. Based on the results of a detailed analysis and isotopic substitution, the experimentally observed absorption bands at 0, 176, and 388 cm(-1) could be assigned to water relaxation modes, an intermolecular TMAO-H2O stretch, and the C-N-C bending mode, respectively. Our results provide evidence for a local modification of the water structure.