Lipid bilayers containing the antimicrobial peptide protegrin-1 (PG-1) were studied by lamellar X-ray diffraction. Previously, we have shown that the peptide exists in two distinct states when associated with lipid bilayers depending on the peptide concentration [Heller, W. T., Waring, A. J., Lehrer, R. I., and Huang, H. W. (1998) Biochemistry 37, 17331-17338]. For concentrations below a lipid-dependent threshold, PG-1 exhibits a unique oriented circular dichroism spectrum called the S state. X-ray experiments show that in this state PG-1 decreases the thickness of the lipid bilayer in proportion to the peptide concentration, similar to alamethicin's membrane thinning effect. This indicates that the S state is adsorbed in the headgroup region of the lipid bilayer, where the peptide is in an inactive state. For PG-1 above the threshold concentration, X-ray diffraction shows that the interaction between the peptide and the bilayer changes significantly. These results suggest that PG-1 has the same concentration-gated mechanism of action as alamethicin.