The interactions of ions with N-methylacetamide (NMA) in hydrated ionic liquid (IL), methylammonium formate (MAF), with varying concentrations were studied by molecular dynamics simulations. As the interactions depend on the choice of potential, the current study aims to compare the preferential binding of cation and anion of MAF to peptide bond of NMA utilizing force field-based classical molecular dynamics (CMD) and first principles molecular dynamics (FPMD) simulations. NMA forms a stable hydrogen bonding network with anion. First principles molecular dynamics simulations predict hydrogen bonding interaction with both anion and cation in pure IL. In contrast, the classical molecular dynamics simulations provide evidence of the strong interaction of NMA with anion only. However, NMA interacts with cation in the presence of water as a co-solvent. Water molecules facilitate the more significant cation-anion distance, which decreases the electrostatic interaction between ions. In aqueous solutions, the self-diffusivity of the entities increases as compared to pure IL. The value of residence time rises with an increase in the concentration of IL. The analysis of hydrogen bond auto-correlation function reveals that with increasing IL concentration, the short-range force increases, and simultaneously, the lifetime of intermolecular hydrogen bonds increases. Between NMA-cation and NMA-anion, the strength of the NMA-anion hydrogen bond is stronger than the former. The preferential solvation is due to nature of predefined classical potential as compared to FPMD simulations. © 2020 Elsevier B.V.