We study the effects of nanoscopic roughness on the interfacial free energy of water confined between solid surfaces. SPC/E water is simulated in confinement between two infinite planar surfaces that differ in their physical topology: one is smooth and the other one is physically rough on a sub-nanometre length scale. The two thermodynamic ensembles considered, with constant pressure either normal or parallel to the walls, correspond to different experimental conditions. We find that molecular-scale surface roughness significantly increases the solid–liquid interfacial free energy compared to the smooth surface. For our surfaces with a water-wall interaction energy minimum of −1.2 kcal mol⁻¹, we observe a transition from a hydrophilic surface to a hydrophobic surface at a roughness amplitude of about 3 Å and a wavelength of 11.6 Å, with the interfacial free energy changing sign from negative to positive. In agreement with previous studies of water near hydrophobic surfaces, we find an increase in the isothermal compressibility of water with increasing surface roughness. Interestingly, average measures of the water density and hydrogen-bond number do not contain distinct signatures of increased hydrophobicity. In contrast, a local analysis indicates transient dewetting of water in the valleys of the rough surface, together with a significant loss of hydrogen bonds, and a change in the dipole orientation toward the surface. These microscopic changes in the density, hydrogen bonding, and water orientation contribute to the large increase in the interfacial free energy, and the change from a hydrophilic to a hydrophobic character of the surface.