Staphylococcus aureus alpha-toxin forms heptameric pores on eukaryotic cell membranes. Assembly of the heptamer precedes formation of the transmembrane pore. The latter event depends on a conformational change that drives a centrally located stretch of 15 amino acid residues into the lipid bilayer. A second region of the molecule that has been implicated in the pre-pore to pore transition is the far N-terminus. Here, we used fluorescently labeled single cysteine replacement mutants to analyze the functional role of the far N-terminus of alpha-toxin. Pyrene attached to mutants S3C, I5C and 17C forms excimers within the toxin pore complex. This indicates that the distance of adjacent N-termini is less than 10-12 Angstrom. By labeling with the polarity-sensitive fluorophore acrylodan, pore formation is shown to cause distinct environmental changes in the N-terminus. Removal of membrane lipids from the labeled heptamers has no effect upon the acrylodan spectrum, indicating lack of direct contact of the N-terminus with the target membrane. The environmental alterations to the N-terminus are thus due to altered protein structure only. Both acrylodan emission shifts and pyrene excimers were shown to be absent in toxin heptamers that were arrested at the pre-pore stage. Therefore, while not being directly involved in membrane penetration, the N-termini of the alpha-toxin heptamer subunits move into immediate mutual proximity concomitantly with transmembrane pore formation.