We present a study of peptide reorientational dynamics in solution analyzed from the perspective of fluorescence anisotropy decay (FAD) experiments, and atomistic molecular dynamics (MD) and continuum hydrodynamics modeling. Earlier, FAD measurements and MD simulations of the model dipeptide N-acetyltryptophanamide (NATA) in explicit water and in aqueous solutions of urea, guanidinium chloride, and proline co-solvents identified excellent agreement of MD results with experimental data, indicating the presence of significant effects of peptide–solvent interactions, and the overall tumbling of the peptide could be well described by contributions from individual conformers, represented by dihedral-restrained MD. Here, we extend these studies by analyzing dynamic inhomogeneity in the solutions and by developing a hydrodynamic model (HM) of the conformer dynamics. The MD simulation data indicate the presence of markedly different dynamic microenvironments for the four studied solutions, with the average water reorientations being different in all systems, partly reflecting the bulk viscosities. Additionally, the water dynamics also exhibited a marked slowdown in the vicinity of the co-solvents, especially chloride and proline. To gain further insight, we applied the HM to predict rotational correlation times of tryptophan for the individual NATA conformers identified in MD. The hydrodynamic results were in very good agreement with MD simulations for the individual structures, showing that the HM model provides a realistic description of rotational diffusion for rigid peptide structures. Overall, our study generated new microscopic insights into the complex nature of the structure and dynamics of peptide solvation shells for systems containing water and denaturing and stabilizing co-solvents.