The dimerization of polyalanine peptides in a hydrophobic environment was explored using replica exchange molecular dynamics simulations. A nonpolar solvent (cyclohexane) was used to mimic, among other hydrophobic environments, the hydrophobic interior of a membrane in which the peptides are fully embedded. Our simulations reveal that while the polyalanine monomer preferentially adopts a beta-hairpin conformation, dimeric phases exist in an equilibrium between random coil, alpha-helical, beta-sheet, and beta-hairpin states. A thermodynamic characterization of the dimeric phases reveals that electric dipole-dipole interactions and optimal side-chain packing stabilize alpha-helical conformations, while hydrogen bond interactions favor beta-sheet conformations. Possible pathways leading to the formation of alpha-helical and beta-sheet dimers are discussed.