Spectroscopic investigations involving the interaction of acridinedione dyes with urea and its derivatives in water and methanol were carried out by absorption, steady-state fluorescence, and time-resolved fluorescence measurements. The hydrogen-bonding properties of urea and derivatives in aqueous solutions are found to be distinctly different from those observed in methanol. Urea, which can serve both as a hydrogen bond donor as well as an acceptor and has a unique hydrogen-bonding feature, helps in studying urea interaction with fluorophores in aqueous solutions, micelles, and alcohol. In our studies, we have used acridinedione dyes as the probe. We report that the hydrophobic interaction of urea with dye predominates by weakening of the hydrogen-bonding interaction of the solvent and urea derivatives with increase in the hydrophobicity of urea derivatives. In methanol, the hydrogen bonding between solvent and urea derivatives predominating over the hydrophobicity of the urea derivatives is observed. The presence of alkyl group substitution in the N-H moiety with a function of increasing concentration resulting in the creation of a more favorable hydrophobic environment to the dye molecule to reside in the hydrophobic shell phase rather than in the bulk aqueous phase is illustrated. The hydrophobic interaction of dye with urea in aqueous solution predominates because of the weakening of the hydrogen bonding of the solvent and urea derivatives, and the photoinduced electron transfer (PET) process is used as a marker to identify the hydrophobic interaction illustrated in our studies.