Quasielastic neutron and light-scattering techniques along with molecular dynamics simulations were employed to study the influence of hydration on the internal dynamics of lysozyme. We identified three major relaxation processes that contribute to the observed dynamics in the picosecond to nanosecond time range: 1), fluctuations of methyl groups; 2), fast picosecond relaxation; and 3), a slow relaxation process. A low-temperature onset of anharmonicity at T approximately 100 K is ascribed to methyl-group dynamics that is not sensitive to hydration level. The increase of hydration level seems to first increase the fast relaxation process and then activate the slow relaxation process at h approximately 0.2. The quasielastic scattering intensity associated with the slow process increases sharply with an increase of hydration to above h approximately 0.2. Activation of the slow process is responsible for the dynamical transition at T approximately 200 K. The dependence of the slow process on hydration correlates with the hydration dependence of the enzymatic activity of lysozyme, whereas the dependence of the fast process seems to correlate with the hydration dependence of hydrogen exchange of lysozyme.