We investigate how a small polar molecule, urea, can act to protect a phospholipid bilayer system against osmotic stress. Osmotic stress can be caused by a dry environment, by freezing, or by exposure to aqueous systems with high osmotic pressure due to solutes like in saline water. A large number of organisms regularly experience osmotic stress, and it is a common response to produce small polar molecules intracellularly. We have selected a ternary system of urea-water-dimyristoyl phosphatidylcholine (DMPC) as a model to investigate the molecular mechanism behind this protective effect, in this case, of urea, and we put special emphasis on the applications of urea in skin care products. Using differential scanning calorimetry, X-ray diffraction, and sorption microbalance measurements, we studied the phase behavior of lipid systems exposed to an excess of solvent of varying compositions, as well as lipid systems exposed to water at reduced relative humidities. From this, we have arrived at a rather detailed thermodynamic characterization. The basic findings are as follows: (i) In excess solvent, the thermally induced lipid phase transitions are only marginally dependent on the urea content, with the exception being that the P, phase is not observed in the presence of urea. (ii) For lipid systems with limited access to solvent, the phase behavior is basically determined by the amount (volume) of solvent irrespective of the urea content. (iii) The presence of urea has the effect of retaining the liquid crystalline phase at relative humidities down to 64% (at 27 degrees C), whereas, in the absence of urea, the transition to the gel phase occurs already at a relative humidity of 94%. This demonstrates the protective effect of urea against osmotic stress. (iv) In skin care products, urea is referred to as a moisturizer, which we find slightly misleading as it replaces the water while keeping the physical properties unaltered. ( v) In other systems, urea is known to weaken the hydrophobic interactions, while for the lipid system we find few signs of this loosening of the strong segregation into polar and apolar regions on addition of urea.