A molecular dynamics simulation of melittin in a hydrated dipalmitoylphosphatidylcholine (DPPC) bilayer was performed. The 19, 000-atom system included a 72-DPPC phospholipid bilayer, a 26-amino acid peptide, and more than 3000 water molecules. The N-terminus of the peptide was protonated and embedded in the membrane in a transbilayer orientation perpendicular to the surface. The simulation results show that the peptide affects the lower (intracellular) layer of the bilayer more strongly than the upper (extracellular) layer. The simulation results can be interpreted as indicating an increased level of disorder and structural deformation for lower-layer phospholipids in the immediate vicinity of the peptide. This conclusion is supported by the calculated deuterium order parameters, the observed deformation at the intracellular interface, and an increase in fractional free volume. The upper layer was less affected by the embedded peptide, except for an acquired tilt relative to the bilayer normal. The effect of melittin on the surrounding membrane is localized to its immediate vicinity, and its asymmetry with respect to the two layers may result from the fact that it is not fully transmembranal. Melittin's hydrophilic C-terminus anchors it at the extracellular interface, leaving the N-terminus "loose" in the lower layer of the membrane. In general, the simulation supports a role for local deformation and water penetration in melittin-induced lysis. As for the peptide, like other membrane-embedded polypeptides, melittin adopts a significant 25 degree tilt relative to the membrane normal. This tilt is correlated with a comparable tilt of the lipids in the upper membrane layer. The peptide itself retains an overall helical structure throughout the simulation (with the exception of the three N-terminal residues), adopting a 30 degree intrahelical bend angle.