RNA peptide interactions have been intensively studied at the structural level, however, in the absence of thermodynamic studies, the molecular forces that dictate the binding specificities and affinities remain elusive Here we evaluate the thermodynamics (Delta G, Delta H, Delta S) of HIV-1 TAR RNA hairpin and Tat peptide interaction as well as the hydration changes that accompany these interactions, through a series of calorimetric, spectroscopic, and osmotic stress studies Tat peptide binding enhances the thermal stability of the TAR RNA hairpin, however, the thermal enhancement decreases with increasing Na+ concentration. The equilibrium association constant (K-a) is determined by fluorescence titrations and examined as a function of Na+ concentration and temperature The binding constant (K-a) decreases with increasing Na+. concentration. The binding free energy (Delta G) is found to have a large nonpolyelectrolyte component with release of a single counterion upon binding The ITC profiles showed two independent sites binding, indicating specific as well as nonspecific interactions The enthalpy changes associated with both the binding sites are found to be more negative for the binding process at lower salt concentration of 20 mM Na+ Our binding studies under osmotic stress conditions show that there is a release of 28 (+/- 4) and 21 (+/- 3) water molecules upon complex formation at 20 and 80 mM Na+ concentration supporting the observed positive entropy contributions and accounting for discrepancies between Delta H-cal and Delta H-vH In aggregate, our results suggest that the hydrogen bonding of arginine to TAR RNA dictates the binding interaction