The purpose of this research was to evaluate the effect and nature of hydration on the glass transition temperature (T_g) of poly(d,l-lactide-co-glycolide) and investigate the physical state of water within the polymer during hygrothermal aging. The polymer was incubated in water at 23, 30, 37 and 55 °C, while the vapor sorption studies were carried out at 37 °C using saturated salt solutions. The water content and the thermal behavior of PLGA-water system were assessed by Karl Fischer titration and modulated differential scanning calorimetry, respectively, the hygrothermal aging was monitored by gel permeation chromatography. Water depressed reversibly the T_g by about 15 °C regardless of the incubation conditions. The T_g then remained constant at ∼30 °C for five days, except when degradation occurred. A broad ice melting peak was detected around 0 °C. In the sorption studies, a linear correlation (r² 0.9837) between the T_g and the moisture content was observed in the range of 0.3–2.6% w/w, but there was no discernible endothermic event associated with the melting of ice. Data were found to fit reasonably well to the Gordon–Taylor/Kelley–Bueche equation. There were no differences between bulk and vapor water aging. It is proposed that the water responsible for plasticizing the polymer was non-freezable (bound) water and the small fraction of such water which was absorbed at high relative humidity caused polymer degradation in the same manner as bulk water.