A spatially resolved version of the density-functional method for solvation thermodynamics is presented by extending the free-energy functional previously established in the one-dimensional, energy representation and formulating a new expression in a mixed four-dimensional representation (three dimensions for position and one dimension for energy). The space was further divided into a set of discrete regions with respect to the relative position of a solvent molecule from the solute, and the spatially decomposed energetics of solvation were analyzed for small molecules with a methyl, amine, or hydroxyl group and alanine dipeptide in solvent water. It was observed that the density of the solvation free energy is weakly dependent on the solute site in the excluded-volume region and is distinctively favorable in the first shells of the solute atoms that can readily form hydrogen bonds with water. The solvent-reorganization term reduces faster with the separation from the solute than the direct interaction between the solute and solvent, and the latter governs the energetics in the second shell and outer regions. The sum of the contributions to the free energy from the excluded volume and first shell was found to deviate significantly from the total sum over all the regions, implying that the solvation free energy is not spatially localized near the solute in a quantitative sense. Still, a local description was shown to be valid as confirmed by the correlation of the total value of free energy with the corresponding value obtained by integrating the free-energy density to the second shell. The theoretical framework developed in the present work to spatially decompose the solvation free energy can thus be useful to identify stabilizing or destabilizing regions of solvent proximate to a solute and to analyze the role that the displacement of interfacial water plays in the thermodynamics of molecular association.