The linear peptide gramicidin forms prototypical ion channels specific for monovalent cations and has been extensively used to study the organization, dynamics and function of membrane-spanning channels. In recent times, the availability of crystal structures of complex ion channels has challenged the role of gramicidin as a model membrane protein and ion channel. This review focuses on the suitability of gramicidin as a model membrane protein in general, and the information gained from gramicidin to understand lipid-protein interactions in particular. Special emphasis is given to the role and orientation of tryptophan residues in channel structure and function and recent spectroscopic approaches that have highlighted the organization and dynamics of the channel in membrane and membrane-mimetic media.