In this work, we present results from molecular dynamics simulations on the single-molecule relaxation of water within reverse micelles (RMs) of different sizes formed by the surfactant aerosol-OT (AOT, sodium bis(2-ethylhexyl)sulfosuccinate) in isooctane. Results are presented for RM water content w(0) = [H(2)O]/[AOT] in the range from 2.0 to 7.5. We show that translational diffusion of water within the RM can, to a good approximation, be decoupled from the translation of the RM through the isooctane solvent. Water translational mobility within the RM is restricted by the water pool dimensions, and thus, the water mean-squared displacements (MSDs) level off in time. Comparison with models of diffusion in confined geometries shows that a version of the Gaussian confinement model with a biexponential decay of correlations provides a good fit to the MSDs, while a model of free diffusion within a sphere agrees less well with simulation results. We find that the local diffusivity is considerably reduced in the interfacial region, especially as w(0) decreases. Molecular orientational relaxation is monitored by examining the behavior of OH and dipole vectors. For both vectors, orientational relaxation slows down close to the interface and as w(0) decreases. For the OH vector, reorientation is strongly affected by the presence of charged species at the RM interface and these effects are especially pronounced for water molecules hydrogen-bonded to surfactant sites that serve as hydrogen-bond acceptors. For the dipole vector, orientational relaxation near the interface slows down more than that for the OH vector due mainly to the influence of ion-dipole interactions with the sodium counterions. We investigate water OH and dipole reorientation mechanisms by studying the w(0) and interfacial shell dependence of orientational time correlations for different Legendre polynomial orders.