Staphylococcal alpha-toxin is a primarily hydrophilic molecule that binds as a monomer to target membranes and then aggregates to form amphiphilic oligomers that represent water-filled transmembrane channels. Current evidence indicates that a region located in the center of the molecule inserts deeply into the bilayer. In the present study, we sought to determine whether membrane insertion was triggered by the oligomerization process, and whether insertion correlated with pore formation. Double mutants of alpha-toxin were prepared in which His-35 was replaced by Arg, and cysteine residues were introduced at positions 69, 130 and 186. Substitution of His-35 with Arg rendered the toxin molecules incapable of proper oligomerization, so that they remained in nonlytic form after binding to membranes. The sulfhydryl groups were labelled with the polarity-sensitive fluorescent dye acrylodan. Functionally intact, single mutant toxins containing only the cysteine residues were utilized as controls. Measurements of the fluorescence emission spectrum of acrylodan were performed for the active and inactive alpha-toxin mutants in free solution and in membrane-bound form. The collective results demonstrate that proper oligomerization is required for membrane insertion of the central region in the alpha-toxin molecule, and that lack of insertion correlates with absence of pore formation.