Aggregation and microheterogeneity in dilute aqueous solutions of 2-butoxyethanol (BE) are investigated employing molecular dynamic simulations. Solutions ranging in concentration from infinite dilution to the BE mole fraction, XBE=0.06, are considered, over the temperature range 300–338.13K. This range includes temperatures both below and above the lower critical solution temperature (LCST) of BE-water solutions. At all temperatures considered, BE association begins at a very low concentration and proceeds very rapidly up to XBE≈0.02, then continues more slowly with the BE aggregates increasing in size with increasing concentration. Physically, the aggregates are loosely formed structures with significant amounts of water remaining in the BE-rich regions. The aggregation appears mainly driven by association of the hydrophobic tails of BE. As is characteristic of entropy driven hydrophobic association, BE aggregation occurs more rapidly and the aggregates increase in size with increasing temperature. Both the aggregate size and their growth with increasing temperature are in qualitative with size estimates from small angle neutron scattering (SANS) experiments. At temperatures above the experimental LCST, we observe demixing at a value of XBE that lies within the two phase region. At higher temperatures and concentrations, the aggregate size approaches the length of the simulation cell, even when 64,000 molecules (water plus BE) are included in the sample. Finite-size effects come into play when the length scales associated with aggregation and microheterogeneity become comparable with the length of the simulation cell, and this important simulation issue is discussed.