The isothermal hybridization of complementary oligonucleotides, 15-mer, 25-mer, 35-mer, and a molecular beacon, was investigated under varying conditions of molecular crowding and ionic strength, using hypochromicity to follow strand pairing and polyethylene glycol as a crowding agent. Thermodynamic analysis of the results revealed the addition of counterions to the oligonucleotide backbones, Delta Psi, to be dependent on the strand GC content and the molecular crowding. A decrease in Delta Psi was observed, with both increasing GC% and solution PEG content. In contrast, the number of bound water molecules depended on the activity of Na+, where two regimes were observed. At a(Na+) < 0.05 and increasing molecular crowding, water molecules were released into the DNA solutions, and oligonucleotide pairing was favored with both increasing hydrophobic forces, whereas at a(Na+) >= 0.05, water molecules were bound to the strands, and the extent of double strand formation decreased with increasing PEG wt %.