In this paper, following our work on the two-state outer neighbor mixed bonding model of water, it is proposed that polar groups promote the formation of the low density ice Ih-type bonding in their neighborhood, whereas nonpolar groups tend to promote the higher density ice II-type structure. In a protein, because of the large numbers of exposed polar and nonpolar groups, large changes in the neighboring water structure can occur. These changes, of course, depend on whether the protein is in its native or its unfolded state and will be shown here to have a direct impact on the thermodynamics of protein unfolding at both high and low temperatures. For example, it is known that the polar hydration entropies become rapidly more negative with increasing temperature. This very unusual behavior can be directly related to the promotion in the outer bulk liquid of the more stable Ih-type bonding at the expense of II-type bonding by polar groups of the protein. In contrast, nonpolar groups have an opposite effect on the thermodynamics. It is the delicate balance created by these outer hydration contributions, mixed with ordinary thermodynamic contributions from the inner hydration shell and those from hydrogen-bond and van der Waals forces within the protein molecule itself that is responsible for both heat and cold denaturation of proteins.