Fundamental understanding of the selective recognition and separation of f-block metal ions by chelating agents is of crucial importance for advancing sustainable energy systems. Current investigations in this area are mostly focused on the study of inner-sphere interactions between metal ions and donor groups of ligands, while the effects on the selectivity resulting from molecular interactions in the outer-sphere region have been largely overlooked. Herein, we explore the fundamental origins of the selectivity of the solvating extractant N,N,N',N'-tetraoctyl diglycolamide (TODGA) for adjacent lanthanides in a liquid-liquid extraction system, which is of relevance to nuclear fuel reprocessing and rare-earth refining technologies. Complementary investigations integrating distribution studies, quantum mechanical calculations, and classical molecular dynamics simulations establish a relationship between coextracted water and lanthanide extraction by TODGA across the series, pointing to the importance of the hydrogen-bonding interactions between outer-sphere nitrate ions and water clusters in a nonpolar environment. Our findings have significant implications for the design of novel efficient separation systems and processes, emphasizing the importance of tuning both inner- and outer-sphere interactions to obtain total control over selectivity in the biphasic extraction of lanthanides.