Molecular interpretations are here presented of the hydrophobic effect, which is the cause of the low solubility of apolar substances in water. The solubilization process of substances such as the noble gases consists in the formation of a cavity in the solvent with expulsion of n_w water molecules. The process is associated to an entropy/enthalpy (S/H) compensation linearly dependent upon the temperature. The observed enthalpy ΔH_app, either determined calorimetrically or by van’t Hoff equation, shows ΔC_p,app ≠ 0 and positive. We set ΔC_p,app = n_wC_p,w where C_p,w is the isobaric heat capacity of water. The number n_w (n_w > 0) of relaxed water molecules is proportional to the size of the solute molecule and hence of the cavity. The term n_wC_p,wT is actually an entropy term, which compensates for part of the reaction enthalpy (ΔH₀ < 0). The entropy change at 298 K linearly depends on n_w, thus showing that cavity formation is associated to a negative entropy change (Δs_cav = –23.2 J K⁻¹ mol⁻¹n_w⁻¹). Beyond a temperature T_min typical of each compound, the reaction becomes endothermic. The highly negative entropy change ΔS_min (at T_min we have ΔH_app = 0) is related to the loss of kinetic energy by the solute molecule when trapped in the cage. Another example of S/H compensation occurs in the formation of micelles. The resultant cage volume after formation of the micelle is smaller than the sum of the cavities previously hosting the single separated apolar moieties. Therefore, some floating water molecules need to be reintroduced into the structure of the solvent (n_w < 0) to fill the void. The contraction of the cavity is associated to a positive entropy change (Δs_fill = 22.4 J K⁻¹ mol⁻¹ |n_w|⁻¹). Protein folding and protein–substrate association behave in a way similar to micellisation (n_w < 0). The present interpretation of the complexation reactions of proteins, and also of micellisation, leads to a new formulation of the so-called ‘hydrophobic bond’: the positive entropy change for cavity contraction is the main driving force of hydrophobic bonding. In the denaturation process as opposite to folding, the denaturation enthalpy ΔH_den at different temperatures T_den depends on positive numbers (n_w > 0) of water molecules. The presence of polar groups and/or charges in the solute molecule, on the other hand, exerts on the water molecules the same action as that produced by micellisation (n_w < 0).