The incommensurately modulated structure of (2S,3S)-2-amino-3-hydroxy-3-methyl-4-phenoxybutanoic acid dihydrate (C11H15NO4·2H2O or I·2H2O) is described in the (3+1)-dimensional superspace group P212121(0β0)000 (β= 0.357). The loss of the three-dimensional periodicity is ascribed to the occupational modulation of one positionally disordered solvent water molecule, where the two positions are related by a small translation [ca 0.666 (9) Å] and ∼168 (5)° rotation about one of its O-H bonds, with an average 0.624 (3):0.376 (3) occupancy ratio. The occupational modulation of this molecule arises due to the competition between the different hydrogen-bonding motifs associated with each position. The structure can be very well refined in the average approximation (all satellite reflections disregarded) in the space group P212121, with the water molecule refined as disordered over two positions in a 0.625 (16):0.375 (16) ratio. The refinement in the commensurate threefold supercell approximation in the space group P1121 is also of high quality, with the six corresponding water molecules exhibiting three different occupancy ratios averaging 0.635:0.365.