Cryopreservation is the only established method for long-term preservation of cells and cellular material. This technique involves preservation of cells and cellular components in the presence of cryoprotective agents (CPAs) at liquid nitrogen temperatures (−196 °C). The organic solvent dimethyl sulfoxide (Me2SO) is one of the most commonly utilized CPAs and has been used with various levels of success depending on the type of cells. In recent years, to improve cryogenic outcomes, the non-reducing disaccharide trehalose has been used as an additive to Me2SO-based freezing solutions. Trehalose is a naturally occurring non-toxic compound found in bacteria, fungi, plants, and invertebrates which has been shown to provide cellular protection during water-limited states. The mechanism by which trehalose improves cryopreservation outcomes remains not fully understood. Raman microspectroscopy is a powerful tool to provide valuable insight into the nature of interactions among water, trehalose, and Me2SO during cryopreservation. We found that the addition of trehalose to Me2SO based CPA solutions dramatically reduces the area per ice crystals while increasing the number of ice crystals formed when cooled to −40 or −80 °C. Differences in ice-formation patterns were found to have a direct impact on cellular viability. Despite the osmotic stress caused by addition of 100 mM trehalose, improvement in cellular viability was observed. However, the substantial increase in osmotic pressure caused by trehalose concentrations above 100 mM may offset the beneficial effects of changing the morphology of the ice crystals achieved by addition of this sugar.