Here, we investigate the effect of urea in the unfolding dynamics of flavin adenine dinucleotide (FAD), an important enzymatic cofactor, through steady state, time-resolved fluorescence spectroscopic and molecular dynamics (MD) simulation studies. Steady state results indicate the possibility of urea induced unfolding of FAD, inferred from increasing emission intensity of FAD with urea. The TCSPC and up-conversion results suggest that the stack-unstack dynamics of FAD severely gets affected in the presence of urea and leads to an increase in the unstack conformation population from 15% in pure water to 40% in 12 M urea. Molecular dynamics simulation was employed to understand the nature of the interaction between FAD and urea at the molecular level. Results depict that urea molecules replace many of the water molecules around adenine and isoalloxazine rings of FAD. However, the major driving force for the stability of this unstack conformations arises from the favorable stacking interaction of a significant fraction of the urea molecules with adenine and isoalloxazine rings of FAD, which overcomes the intramolecular stacking interaction between themselves observed in pure water. © 2014 American Chemical Society.