Constant pressure and temperature (NPT) molecular dynamics (MD) simulations have been carried out to investigate the properties of a binary mixture of the poly(oxyethylene) surfactant C12E2 and water in its liquid crystalline lamellar phase (L-alpha). The calculated interlamellar spacing and the area per surfactant were found to be in reasonable agreement with X-ray diffraction results. The water molecules were observed to form hydrogen bonded bridged structures linking the oxygen atoms of the same surfactant chain. This interaction leads to a strong preference for the C-C bonds in the headgroup to attain a gauche conformation.