Tryptophan octyl ester (TOE) represents an important model for membrane-bound tryptophan residues. In this article, we have employed a combination of wavelength-selective fluorescence and time-resolved fluorescence spectroscopies to monitor the effect of varying degrees of hydration on the dynamics of TOE in reverse micellar environments formed by sodium bis(2-ethylhexyl) sulfosuccinate (AOT) in isooctane. Our results show that TOE exhibits red edge excitation shift (REES) and other wavelength-selective fluorescence effects when bound to reverse micelles of AOT. Fluorescence parameters such as intensity, emission maximum, anisotropy, and lifetime of TOE in reverse micelles of AOT depend on [water]/[surfactant] molar ratio (w o). These results are relevant and potentially useful for analyzing dynamics of proteins or peptides bound to membranes or membrane-mimetic media under conditions of changing hydration.