A persistent puzzle in the field of biological electron transfer is the conserved iron-sulfur cluster motif in both high potential iron-sulfur protein (HiPIP) and ferredoxin (Fd) active sites. Despite this structural similarity, HiPIPs react oxidatively at physiological potentials, whereas Fds are reduced. Sulfur K-edge x-ray absorption spectroscopy uncovers the substantial influence of hydration on this variation in reactivity. Fe-S covalency is much lower in natively hydrated Fd active sites than in HiPIPs but increases upon water removal; similarly, HiPIP covalency decreases when unfolding exposes an otherwise hydrophobically shielded active site to water. Studies on model compounds and accompanying density functional theory calculations support a correlation of Fe-S covalency with ease of oxidation and therefore suggest that hydration accounts for most of the difference between Fd and HiPIP reduction potentials.