The pH low-insertion peptide (pHLIP) serves as a model system for peptide insertion and folding across a lipid bilayer. It has three general states: (I) soluble in water or (II) bound to the surface of a lipid bilayer as an unstructured monomer, and (III) inserted across the bilayer as a monomeric alpha-helix. We used fluorescence spectroscopy and isothermal titration calorimetry to study the interactions of pHLIP with a palmitoyloleoylphosphatidylcholine (POPC) lipid bilayer and to calculate the transition energies between states. We found that the Gibbs free energy of binding to a POPC surface at low pHLIP concentration (state I-state II transition) at 37 degrees C is approximately -7 kcal/mol near neutral pH and that the free energy of insertion and folding across a lipid bilayer at low pH (state II-state III transition) is nearly -2 kcal/mol. We discuss a number of related thermodynamic parameters from our measurements. Besides its fundamental interest as a model system for the study of membrane protein folding, pHLIP has utility as an agent to target diseased tissues and translocate molecules through the membrane into the cytoplasm of cells in environments with elevated levels of extracellular acidity, as in cancer and inflammation. The results give the amount of energy that might be used to move cargo molecules across a membrane.