Intermediate filaments (IFs) are ubiquitous in biological structures including hair. Small-angle neutron scattering (SANS) data from hydrated samples were used in this study to investigate the distribution of water in hair, and model the structure of the IF assembly. A main diffraction peak at a d-spacing of similar to 90 angstrom, and two weaker reflections show that IFs are arranged in a similar to 105 angstrom quasi-hexagonal lattice. Changes in the diffraction peaks show that only a small fraction of the water absorbed by hair enters between the IFs, and little water diffuses into the core of the IFs. The amount of water in the IF assembly increases rapidly up to 10% relative humidity (RH), and then slowly with further increase in RH. Most of the water appears to reside outside the IF assembly, in the voids and at the interfaces, and contribute to the central diffuse scattering. The IF assembly in the decuticled hair absorbs more water and is more ordered than that the native hair. This suggests that cuticle acts as a barrier, and might constrain the structure by compressing the cortex radially. Treatments with oils that are hydrophobic, heat treatment, and reduction of the S-S linkages that opens up the matrix by disulfide bond cleavage, all affect structure and water permeability. Coconut oil was found to impede hydration more than the soybean oil because of its ability to penetrate deeper into hair. A new model for the IF assembly that is sterically more favorable than the previous models is proposed.