Near- (NIR) and mid-infrared (MIR) absorption spectra of pure and water-saturated 1-octanol were measured along the liquid gas coexistence curve from ambient temperature and pressure up to 300 degrees C and 10 MPa. Density of the mixture as a function of temperature was assessed by spectral analysis in the NIR region. Two distinct regimes of temperature were identified in the evolution of solvent-subtracted spectra: at normal conditions and up to 180 degrees C, water is organized in multimeric H-bonded aggregates, while at higher temperature, mainly dimers and monomers exist. Water water and alcohol alcohol H-bonding interactions play a major role in wet octanol at low temperature, with resulting microheterogeneity and water segregation at a molecular level; on the other hand, water alcohol interactions are relevant at higher temperature, as also revealed by the estimated density. At low temperature, water dissolved in octanol shows features which are comparable to those of interfacial water obtained by vibrational sum frequency (VSF) spectroscopy, while at high temperature the spectra generally reproduce those of water in the supercritical phase. Overall spectral assignment was supported by ab initio calculations at the MP2 level on small water clusters.