An overwhelming number of structural and functional studies on specific protein-DNA complexes reveal the existence of water molecules at the interaction interface. What role does the interfacial water molecules play in determining the specificity of association is thus a critical question. Herein, we have explored the dynamical role of minor groove water molecules and DNA side chain flexibility in lambda repressor-operator DNA interaction using well-characterized DNA minor groove binder dye, Hoechst 33258. The most striking finding of our studies reveals that the solvation time scale corresponding to the minor groove water molecules (∼50 ps) and DNA side chain flexibility (∼10 ns) remain unaltered even in protein-DNA complex in comparison to unbound operator DNA. The temperature dependent study further reveals the slower exchange of minor grove water molecules with bulk water in DNA-protein complex in comparison to the unbound DNA. Detailed structural studies including circular dichroism (CD) and Förster resonance energy transfer (FRET) have also been performed to elucidate the interaction between protein and DNA.