The structural properties of the endogenous opioid peptide dynorphin A(1-17) (DynA), a potential analgesic, were studied with molecular dynamics simulations in dimyristoylphosphatidylcholine bilayers. Starting with the known NMR structure of the peptide in dodecylphosphocholine micelles, the N-terminal helical segment of DynA (encompassing residues 1-10) was initially inserted in the bilayer in a perpendicular orientation with respect to the membrane plane. Parallel simulations were carried out from two starting structures, systems A and B, that differ by 4 A in the vertical positioning of the peptide helix. The complex consisted of approximately 26,400 atoms (dynorphin + 86 lipids + approximately 5300 waters). After >2 ns of simulation, which included >1 ns of equilibration, the orientation of the helical segment of DynA had undergone a transition from parallel to tilted with respect to the bilayer normal in both the A and B systems. When the helix axis achieved a approximately 50 degrees angle with the bilayer normal, it remained stable for the next 1 ns of simulation. The two simulations with different starting points converged to the same final structure, with the helix inserted in the bilayer throughout the simulations. Analysis shows that the tilted orientation adopted by the N-terminal helix is due to specific interactions of residues in the DynA sequence with phospholipid headgroups, water, and the hydrocarbon chains. Key elements are the "snorkel model"-type interactions of arginine side chains, the stabilization of the N-terminal hydrophobic sequence in the lipid environment, and the specific interactions of the first residue, Tyr. Water penetration within the bilayer is facilitated by the immersed DynA, but it is not uniform around the surface of the helix. Many water molecules surround the arginine side chains, while water penetration near the helical surface formed by hydrophobic residues is negligible. A mechanism of receptor interaction is proposed for DynA, involving the tilted orientation observed from these simulations of the peptide in the lipid bilayer.