We examined the effects of molecular crowding conditions on the structures and thermodynamics of three-way junctions (TWJs) of DNA. Structural analysis utilizing gel electrophoresis and circular dichroism spectroscopy showed that the designed DNAs folded into TWJ structures in the presence of Na+ and Mg2+ under both dilute and molecular crowding conditions with polyethylene glycol 200 (PEG 200). From the thermodynamic parameters evaluated by UV melting techniques in the absence and presence of 5 mM Mg2+ under dilute and molecular crowding conditions, it was clear that Mg2+ stabilized all TWJs under the dilute condition, although the extent of stabilization depended on the stacking partners of TWJs. For example, thermodynamic stability (-Delta G degrees(37)) of A/B-stacked TWJs (A, B, and C are the three helices of TWJ, and among these helices, A and B are stacked together) increased from 3.7 to 5.6 kcal/mol by the addition of 5 mM Mg2+, while that of A/C-stacked TWJs (A and C are stacked together) increased only from 3.0 to 3.7 kcal/mol. Molecular crowding with PEG 200 destabilized the whole TWJ consisting of a junction point and three helical duplex arms. Crowding agents such as PEG 200 can affect the stability of DNA by modulating its hydration. To explore the crowding effects on the junction point, we evaluated the number of water molecules associated with the whole TWJ as well as the individual arms, and we found that the number of water molecules taken up by the whole TWJ was significantly smaller than the sum of the individual arms. These results show the dehydration from the junction point of the TWJ structure. Therefore, molecular crowding should be favorable for the junction point of TWJ structure and unfavorable for the duplex structure. To prove this concept, we designed truncated TWJ structures that folded into a bimolecular duplex under the dilute condition. With increasing concentrations of PEG 200 from 0 to 30 wt %, the fraction of truncated TWJ structures gradually increased, and that of the bimolecular duplex structure decreased, even in the absence of Mg2+. We concluded that a cell-mimicking condition, in which the activity of water decreases and hydration becomes less favorable, might facilitate the formation of junction structures in comparison with duplexes.