We report a computer simulation study of the effect of trimethylamine N-oxide (TMAO) on the pressure stability of the hydrophobic contact interaction of two nonpolar α-helices. We found that TMAO counterbalanced the disruptive effect of pressure destabilization on account of an earlier reported electronic polarization effect that led to an increased TMAO dipole moment under compression of the solvent. This direct stabilization mechanism became ineffective when the dipole polarization of TMAO was not considered and was linked to nonspecific van der Waals interactions of TMAO with the nonpolar surfaces of the two helices, which became weaker as TMAO became stronger polarized at high pressure. The corresponding thermodynamic driving forces are discussed and should be generic for hydrophobic interactions under high pressure. The proposed mechanism suggests that TMAO stands out as a piezolyte among stabilizing osmolytes, potentially protecting biological assemblies formed by hydrophobic interactions under extreme pressure conditions.