Whereas the barrel-stave configuration is accepted by most investigators as a good description of the conducting state of alamethicin, there are conflicting interpretations on its nonconducting state; in the absence of an applied field, some found alamethicin molecules on the membrane surface, but others found them incorporated in the hydrophobic core of the membrane. This problem is resolved by the discovery of a phase-transitionlike behavior of alamethicin in the membrane. As a function of lipid/peptide ratio L/P and the chemical potential of water mu, alamethicin molecules were observed to switch between two states: in one, the majority of the peptide molecules bind parallel to the membrane surface; in another, the majority of the peptide molecules insert perpendicularly into the membrane. The state of alamethicin was monitored by the method of oriented circular dichroism (OCD; Wu, Y., H. W. Huang, and G. A. Olah, 1990, Biophys. J. 57:797-806) using aligned multilayer samples in the liquid crystalline L(alpha) phase. If L/P exceeds a critical value, most of the peptide molecules are on the membrane surface. If L/P is below the critical value, most of the peptide molecules are incorporated in the membrane when mu is high; when mu is low, most of them are again on the membrane surface. In a typical conduction experiment of voltage dependence, alamethicin molecules are in a partition equilibrium between the aqueous phase and the lipid phase before the application of voltage; in the lipid phase, the lipid/peptide ratio is such that most of alamethicin molecules are on the membrane surface. This is the nonconducting state of alamethicin. The OCD analysis showed that there is essentially no change in the secondary structure when alamethicin changes between the surface state and the inserted state. The voltage-gating mechanism can be explained if we assume that these surface peptide molecules probabilistically turn into the membrane core to form channels due to the dipole-electric field interactions. We speculate that the phase-transitionlike behavior is a manifestation of membrane-mediated intermolecular interactions between peptide molecules.