Simple sugars, especially disaccharides, stabilize biomaterials of various composition during air-drying or freeze-drying. We and others have provided evidence that direct interaction, an interaction that we believe is essential for the stabilization, between the sugar and polar groups in, for example, proteins and phospholipids occurs in the dry state. Some researchers, however, have suggested that the ability of the sugar to form a glass is the only requirement for stabilization. More recently, we have shown that both glass formation and direct interaction of the sugar and headgroup are often required for stabilization. In the present study, we present a state diagram for trehalose glass and suggest that the efficacy of this sugar for stabilization may be related to its higher glass transition temperatures at all water contents. We also show that trehalose and trehalose:liposome preparations form trehalose dihydrate as well as trehalose glass when rehydrated with water vapor. Formation of the dihydrate sequesters water, which might otherwise participate in lowering the glass transition temperature to below ambient. Because samples remain in the glassy state at ambient temperatures, viscosity is high and fusion between liposomes is prevented.