The coil-to-globule transition of poly(N-isopropylacrylamide) (pNIPAm) in water is generally believed to be driven by hydrophobic interaction between the isopropyl groups of its side chains. However, it is still unclear how dehydration and critical fluctuations of the polymer chains are correlated. Here, we use small-and wide-angle x-ray scattering and dielectric relaxation spectroscopy to cover a wide range of the relevant length and time scales, enabling us to grasp an overall picture of this phase transition. We find that the hydration number of pNIPAm decreases only moderately with temperature up to about 6 K below its spinodal temperature T-S, but then drops steeply on approaching T-S. This rapid dehydration is coupled to a mean-field-like power-law divergence of the correlation length xi, representing fluctuations of the density order parameter. Real-space decoding of an observed interference peak reveals partial-globule formation even far below T-S and demonstrates that the polymer-rich phase above T-S can be understood as a high-density assembly of the microglobules. Strikingly, condensation of the microglobules and the divergence of xi do not run parallel. Instead, the condensation occurs only above T-S and is completed about 6 K above T-S. The local number density of the microglobules, exhibiting a steplike increase just above T-S, should be identified as an additional microscopic order parameter governing the phase transition of pNIPAm.