Stably folded membrane proteins reside in a free energy minimum determined by the interactions of the peptide chains with each other, the lipid bilayer hydrocarbon core, the bilayer interface, and with water. The prediction of three-dimensional structure from sequence requires a detailed understanding of these interactions. Progress toward this objective is summarized in this review by means of a thermodynamic framework for describing membrane protein folding and stability. The framework includes a coherent thermodynamic formalism for determining and describing the energetics of peptide-bilayer interactions and a review of the properties of the environment of membrane proteins--the bilayer milieu. Using a four-step thermodynamic cycle as a guide, advances in three main aspects of membrane protein folding energetics are discussed: protein binding and folding in bilayer interfaces, transmembrane helix insertion, and helix-helix interactions. The concepts of membrane protein stability that emerge provide insights to fundamental issues of protein folding.