A new bismuth-containing layered perovskite of the Ruddlesden-Popper type, K(2.5)Bi(2.5)Ti4O13, has been prepared by solid-state synthesis. It has been shown to hydrate to form stoichiometric K(2.5)Bi(2.5)Ti4O13·H2O. Diffraction data show that the structure consists of a quadruple-stacked (n = 4) perovskite layer, with potassium ions occupying the rock salt layer and its next-nearest A site. The hydrated sample was shown to remove the offset between stacked perovskite layers relative to the dehydrated sample. Computational methods show that the hydrated phase consists of intact H2O molecules in a vertical "pillared" arrangement bridging across the interlayer space. Rotations of H2O molecules about the c axis were evident in molecular dynamic calculations, which increased in rotation angle with increasing temperature. In situ diffraction data for the dehydrated phase point to a broad structural phase transition from orthorhombic to tetragonal at ∼600 °C. The relative bismuth-rich composition in the perovskite block results in a higher transition temperature compared to related perovskite structures. Water makes a significant contribution to the dielectric constant, which disappears after dehydration.