Src Homology 2 (SH2) domains are approximately 100 amino acid domains that mediate recognition of tyrosine-phosphorylated sites by signalling proteins. Structures of SH2 domains with bound ligands indicate a potentially important role of water in influencing the binding thermodynamics. In this study, we used molecular dynamics (MD) simulation methods to evaluate solvation sites at the binding interface of the Src SH2 domain. We designed a software, WaRP (Water Residency Potential), to compute the positions of hydration sites from coordinates data of MD simulations and studied the impact of the computed positions on the prediction of the thermodynamics of Src SH2 domain binding to phosphorylated peptides using a method based on accessible surface area buried upon association. Two dually phosphorylated ligands and one monophosphorylated ligand were studied. We showed that the software predicted between 70% and 85% of the crystallographic water molecules depending on complexes. Comparison of the predicted water structures of both the bound and unbound binding partners led to a thorough evaluation of water behaviour during the binding reaction. We also showed that the predicted water structures of all ligand-SH2 domain structures investigated may be used to derive the entropy change provided that the heat capacity change is known. This study is the first to examine the dynamics of the water structure around the SH2 domain binding interface and contributes to our understanding of binding thermodynamics in SH2 domains.