In this work we present a Monte-Carlo simulation of propionic acid in aqueous solution and look into the structural and thermodynamic behavior of an amphiphiIe at temperatures of 285, 298 and 330 K. All Monte-Carlo simulations were done with one solute and 338 water molecules, a NVT ensemble, a polarizable ab initio potential, Metropolis sampling, and periodic boundary conditions. On the technical side we show that very large statistical samples (8x10(8)) are needed to attain reliable results and that accounting for microscopic detail is needed to find patterns that are hidden by averaging. Related to the molecular basis of hydrophobicity we found that solute-water interactions, even around the hydrophobic tail, lead to a favorable enthalpic effect, in agreement with other simulations. We also found that the tail enhances water-water interactions as compared to pure water, in agreement with the experiment. An important finding is that the anomalous solubility seems to come from an induced structure of waters neighboring the hydrophobic tail. On the contrary, at low temperatures the polar head loses its hydration shell as the water network becomes important. From a detailed analysis we propose an interplay of several factors as the reason for hydrophobicity. (C) 1997 American Institute of Physics.