The A21978C group are lipopeptide antibiotics which kill Gram-positive bacteria only in the presence of calcium ions. The calcium requirement of the antibacterial activity of A21978C correlates well with an in vitro calcium-dependent insertion into phospholipid vesicles. In this paper the interaction of A21978C with phosphatidylcholine is investigated in mixed monomolecular films. The spontaneity of the antibiotic-lipid mixing was determined by calculating the free energy change. On a Ca2+ containing subphase there is a specific interaction between the components at all antibiotic-lipid ratios. This is not true on K+ subphases, where specific interactions never occur. On Mg2+ subphases specific interactions occur only in monolayers containing very little lipid. By analysing the fluorescence of the kynurenine residue we have followed the effects of two factors on the penetration of the antibiotic into lipid bilayer vesicles. Firstly, the phospholipid gel to liquid crystalline phase transition which in the absence of calcium leads to an exclusion of the antibiotic from the bilayer. This trend is completely reversed in the presence of Ca2+. Secondly, the role of this lipopeptide's lipid tail was clarified by use of a series of versions of increasing fatty acyl chain length. The results indicate that the interaction promoted by calcium is not simply a hydrophobic attraction between fatty acyl chains but is more likely to be a specific interaction between polar headgroups.