We find evidence for hydrated material in the lunar regolith using “albedo protons” measured with the Cosmic Ray Telescope for the Effects of Radiation (CRaTER) on the Lunar Reconnaissance Orbiter (LRO). Fluxes of these albedo protons, which are emitted from the regolith due to steady bombardment by high energy radiation (Galactic Cosmic Rays), are observed to peak near the poles, and are inconsistent with the latitude trends of heavy element enrichment (e.g., enhanced Fe abundance). The latitudinal distribution of albedo protons anti-correlates with that of epithermal or high energy neutrons. The high latitude enhancement may be due to the conversion of upward directed secondary neutrons from the lunar regolith into tertiary protons due to neutron–proton collisions in hydrated regolith that is more prevalent near the poles. The CRaTER instrument may thus provide important measurements of volatile distributions within regolith at the Moon and potentially, with similar sensors and observations, at other bodies within the Solar System.