While the liquid–liquid phase separation (LLPS) process in proteins has been studied in great detail, it has not been widely explored how the associated protein hydration changes during the process and how crucial its role is in the process itself. In this contribution, we experimentally explore the alteration of lysozyme hydration during its LLPS process using attenuated total reflection (ATR)-FTIR spectroscopy in the THz frequency region (1.5–21 THz). Additionally, we explore the role of excipients (l-arginine, sucrose, bovine albumin (BSA), and ubiquitin (Ubi)) in regulating the process and found that, while sucrose stabilizes the LLPS, BSA inhibits it. The effect of Arg in the LLPS is subtle, and that of Ubi is concentration dependent. We made a detailed analysis of the hydration profile of Lys in the presence of these excipients and observe that a change in hydration in terms of H-bond making/breaking is a definite signature regulating the process.