We have produced by phage-display a disulfide-linked cyclic nonapeptide (inhibitory peptide-01, IP01), CLLRMRSIC, that binds to intracellular adhesion molecule-1 (ICAM-1) and blocks binding to its counter-structure, leukocyte functional antigen-1 (LFA-1). As a first step towards improving its pharmacologic properties, we have performed a structural and functional analysis of this peptide inhibitor to determine the features relevant to ICAM-1 binding. We report here the solution model of our initial product, IP01, as derived from two-dimensional nuclear magnetic resonance (NMR) restraints and molecular modeling. Distance and dihedral angle restraints, generated from nuclear Overhauser effect spectroscopy (NOESY) and one-dimensional-NMR experiments respectively, were used to generate an ensemble of structures using distance geometry and simulated annealing. Molecular dynamic simulations produced three interconverting conformational families consistent with the NMR-derived constraints. We describe these conformations and their mechanism of interconversion. Furthermore, we have measured the IC50 s of a series of inhibitors generated from IP01 through alanine substitution of each residue. These results show that the L2-L3-R4-M5-R6 segment is functionally active, conformationally flexible, and contains a beta-turn involving residues R4-S7, while the C1-C9-I8-S7 segment is less functionally-active but adopts a more defined solution conformation, consistent with a scaffolding function. This model will be useful for designing nonpeptide-based organic inhibitors with improved pharmacologic properties.