Ionic liquids (ILs) are eco-friend and recyclable solvents for dissolution of wool keratin, and water is often used as antisolvent to regenerate keratin from IL solution. To recycle the ILs, removing water is the necessary step. However, complete removal of the water is energy-intensive and costly. The water in ionic liquids would change the physicochemical properties and cluster structures of the IL and further affect its dissolution behavior on keratin. Here, 1-ethyl-3-methylimidazolium dimethylphosphate ([Emim]DMP) was used for experiments due to its good performance on dissolving keratin. The experimental and simulation results showed that the dissolving capability of [Emim]DMP was decreased and the interactions between cation and anion became weaker with water concentration increasing. Furthermore, the dissolution time of wool keratin in [Emim]DMP increased with water content rising. At the same time, the effect of water in ILs on the secondary structure distribution and thermal stability of regenerated keratin was not obvious. In this work, by taking the structures of [Emim]DMP, keratin dissolution time and properties of the regenerated keratin into consideration, a balanced range of water content in [Emim]DMP was determined, which could not only reduce recycling cost but also not affect the dissolution behavior of the IL.