The protein PDEδ is an important solubilizing factor for several prenylated proteins including the Ras subfamily members. The binding occurs mainly through the farnesyl anchor of Ras proteins, which is recognized by a hydrophobic pocket of PDEδ. In this study, we carried out a detailed study of the thermodynamic and solvational properties of PDEδ binding to farnesyl-cystein, which serves as a model for PDEδ association to prenylated proteins. Using various biophysical approaches in conjunction with theoretical considerations, we show here that binding of the largely hydrophobic ligand surprisingly has enthalpy-driven signature, and the entropy change is largely controlled by the fine balance between the hydrational and conformational terms. Moreover, binding of PDEδ to farnesyl-cystein is accompanied by an increase in thermal stability, the release of about 150 water molecules from the interacting species, a decrease in solvent accessible surface area, and a marked decrease of the volume fluctuations and hence dynamics of the protein. Altogether, our results shed more light on the molecular mechanism of PDEδ interaction with prenylated Ras proteins, which is also prerequisite for an optimization of the structure-based molecular design of drugs against Ras related diseases and for understanding the multitude of biological functions of PDEδ.