The correlation between protein solubility and the preferential interactions of proteins with solvent components was critically examined with aqueous MgCl2 as the solvent system. Preferential interaction and solubility measurements with three proteins, .beta.-lactoglobulin, bovine serum albumin, and lysozyme, resulted in similar patterns of interaction. At acid pH (pH 2-3) and lower salt concentrations (< 2 M), the proteins were preferentially hydrated, while at higher salt concentrations, the interaction was either that of preferential salt binding or low salt exclusion. At pH 4.5-5, all three proteins exhibited either very low preferential hydration or preferential binding of MgCl2. These results were analyzed in terms of the balance between salt binding and salt exclusion attributed to the increase in the surface tension of water by salts, which is invariant with conditions. It was shown that the increase in salt binding at high salt concentration is a reflection of mass action, while its decrease at acid pH is due to the electrostatic repulsion between Mg2+ ions and the high net positive charge on the protein. The preferential interaction pattern was paralleled by the variation of protein solubility with solvent conditions. Calculation of the transfer free energies from water to the salt solutions for proteins in solution and in the precipitate showed parallel dependencies on salt concentration. This indicates that the nature of interactions between proteins and solvent components is the same in solution and in the solid state, which implies no change in protein structure during precipitation. Analysis of the transfer free energies and preferential interaction parameter in terms of the salting-in, salting-out, and weak ion binding contributions has led to the conclusions that, when the weak ion binding contribution is small, the predominant protein-salt interaction must be that of preferential salt exclusion most probably caused by the increase of the surface tension of water by addition of the salt. A necessary consequence of this is salting-out of the protein, if the protein structure is to remain unaltered.