A multiscale computational study was performed with the aim of tracing the source of stereoselectivity and disclosing the role of water in the stereoselective step of propionaldehyde aldol self-condensation catalyzed by proline amide in water, a reaction that serves as a model for aqueous organocatalytic aldol condensations. Solvent mixing and hydration behavior were assessed by classical molecular dynamics simulations, which show that the reaction between propanal and the corresponding enamine takes place in a fully hydrated environment. First-principles molecular dynamics simulations were used to study the free-energy profile of four possible reaction paths, each of which yields a different stereoisomer, and high-level static first-principles calculations were employed to characterize the transition states for microsolvated species. The first solvation shell of the oxygen atom of the electrophilic aldehyde at the transition states contains two water molecules, each of which donates one hydrogen bond to the nascent alkoxide and thereby largely stabilizes its excess electron density. The stereoselectivity originates in an extra hydrogen bond donated by the amido group of proline amide in two reaction paths.