Structurally conserved water molecules are important for biomolecular stability, flexibility, and function. X-ray crystallographic studies of Pin1 have resolved a number of water molecules around the enzyme, including two highly conserved water molecules within the protein. The functional role of these localized water molecules remains unknown and unexplored. Pin1 catalyzes cis/trans isomerizations of peptidyl prolyl bonds that are preceded by a phosphorylated serine or threonine residue. Pin1 is involved in many subcellular signaling processes and is a potential therapeutic target for the treatment of several life threatening diseases. Here, we investigate the significance of these structurally conserved water molecules in the catalytic domain of Pin1 using molecular dynamics (MD) simulations, free energy calculations, analysis of X-ray crystal structures, and circular dichroism (CD) experiments. MD simulations and free energy calculations suggest the tighter binding water molecule plays a crucial role in maintaining the integrity and stability of a critical hydrogen-bonding network in the active site. The second water molecule is exchangeable with bulk solvent and is found in a distinctive helix-turn-coil motif. Structural bioinformatics analysis of nonredundant X-ray crystallographic protein structures in the Protein Data Bank (PDB) suggest this motif is present in several other proteins and can act as a water site, akin to the calcium EF hand. CD experiments suggest the isolated motif is in a distorted PII conformation and requires the protein environment to fully form the α-helix-turn-coil motif. This study provides valuable insights into the role of hydration in the structural integrity of Pin1 that can be exploited in protein engineering and drug design.