Conductance flucutations induced by low concentrations of alamethicin in planar lipid bilayer membranes have been examined with a novel computer-aided analysis. A precise test is applied to show that the system is Markovian (except for the zeroth state) and an estimate is given for the (small) number of transitions between nonadjacent states: the system closely conforms to a birth-and-death process. The complete set of rate parameters governing the steady-state distribution is derived, and it is shown that these parameters can be used to reconstruct exactly the experimental relative frequency distribution. It is also shown that the electrochemical free energies of the conductance states vary quadratically with state number for low-lying states; the free energies of activation of both the birth and death processes are linearly related to the free-energy differences between states but the transfer coefficient is close to unity. A detailed model based on the nucleation of a two-dimensional pore accounts for these observations provided both birth and death take place via an intermediate expansion of the pore lumen. This model requires two energy parameters, the "edge" and "bulk" energies of the pore, together with a trigger rate of the initial process which is a sufficient description for the steady-state behavior of this voltage-controlled system.