Direct and indirect mechanisms have been used to explain the effect of urea on surfactant aggregates. By studying formation properties, anion selectivities, and stabilities of cationic and zwitterionic micelles and of cationic vesicles, we confirm previous evidence in favor of the direct mechanism (Langmuir 1995, 11, 1715). Differential fluorescence suppression of 2,3-N-butylnaphthalimide by Br- and Cl- is used to investigate in a short time scale (nanoseconds) effects of urea on ion binding and exchange in micelles and vesicles. Enhanced degree of dissociation and decreased anion selectivity of the surfactant aggregates are observed. Micellar catalysis of the unimolecular decarboxylation of 3-carboxy-6-nitrobenzoxazol studied to investigate the effect of the additive on a long range (minutes) also shows a reduced anion selectivity. Formation properties of the thermodynamically stable (cmc) and nonstable aggregates (hydrodynamic radii and molecular weight) are measured to obtain parameters for analysis. Addition of urea caused increase in the cmc and led to increase in vesicles molecular weight and hydrodynamic radii. These results support preferential headgroup solvation in the aggregates (direct mechanism) by urea resulting in the loss, or size reduction, of the interfacial region for counterion specificity (size, polarizability, and other non-Coulombic terms) to manifest.