The properties of melittin and a synthetic analogue, [Ala-14]melittin (P14A), in inducing reversible transitions between vesicles and micelles at the liquid-crystalline to gel phase transition temperature (Tm) in complexes with saturated phosphatidylcholines has been studied by deuterium NMR and freeze-fracture electron microscopy (EM). At concentrations between 3 and 5 mol% relative to lipid, each peptide causes reversible micellization of dimyristoylphosphatidylcholine (DMPC) bilayers when the temperature is lowered below Tm. At concentrations of 5 mol% relative to lipid, the peptides induce macroscopic magnetic orientation of DMPC bilayers at temperatures around the centre of the lipid phase transition; at temperatures a few degrees above Tm, magnetic orientation is lost. These effects suggest a progressive phase separation of peptide and lipid on cooling the complexes through the phase transition, resulting in increased vesicle deformability. The rates of gel phase micellization, and of bilayer reformation from micelles at temperatures above Tm, are decreased by 100-fold in P14A:DMPC complexes compared with melittin: DMPC complexes. Freeze-fracture EM indicates that P14A suppresses the formation of the gel phase in DMPC bilayers at temperatures below Tm. EM observations of the time-dependence of the reformation of bilayers from micelles after incubating P14A:DMPC micellar complexes at temperatures above Tm indicate that micelles fuse to form growing bilayer sheets from which multilamellar vesicles eventually form. The presence of intramembranous particles (IP) on the fracture faces of both melittin: DMPC complexes and P14A:DMPC complexes in the fluid phase indicates that under the conditions of the study (50 mM Tris-HCl (pH 7.5), 5 mM EDTA) the peptides are organized as discrete aggregates that penetrate deeply into the bilayer.