We investigate the aggregation and collapse of water soluble amphiphilic polymer, poly(N-isopropylacrylamide) (PNIPAM), in aqueous solution containing variable amount of trehalose, sucrose and sorbitol. The effect of these osmolytes on the coil to globular transition of the PNIPAM is studied by the use of comprehensive biophysical techniques like UV-visible spectroscopy, fluorescence spectroscopy, dynamic light scattering and Fourier transform infrared spectroscopy (FTIR). The polarization induced by these additives promotes the collapsed state of PNIPAM at much lower temperature as compared to the pure PNIPAM in aqueous solution. The decrease in the lower critical solution temperature (LCST) of the polymer with increase in the concentration of osmolyte is due to the significant changes in the interactions among polymer, osmolyte and water. The high affinity of these additives toward water destabilize the hydrated macromolecular structure via preferential interactions. To investigate the molecular mechanism behind the decrease in the LCST of the polymer in presence of the osmolytes, a molecular dynamics (MD) study was performed. The MD simulation has clearly shown the reduction in hydration shell of the polymer after interacting with the osmolyte. MD study revealed significant changes in polymer conformation because of osmolyte interaction and strongly supports the experimental observation of polymer phase transition at temperature lower than typical LCST. The driving force for concomitant sharp configurational transition has been attributed to the rupture of hydrogen bonds between water and polymer and to the hydrophobic association of the polymer. The results of the present study can be used in the bioresponsive smart PNIPAM-based devices as its LCST is close to body temperature. This study provides an alternative method to tune the LCST of the widely accepted model PNIPAM polymer. (C) 2017 Elsevier Inc. All rights reserved.