A key factor in the development of Type II diabetes is the loss of insulin producing pancreatic beta-cells. The amyloidogenic human Islet Amyloid Polypeptide (hIAPP also known as human amylin) is believed to play a crucial role in this biological process. Previous studies have shown that hIAPP forms small aggregates that kill beta-cells by disrupting the cellular membrane. In this study, we report membrane fragmentation by hIAPP using solid-state NMR experiments on nanotube arrays of anodic aluminum oxide containing aligned phospholipid membranes. In a narrow concentration range of hIAPP, an isotropic (31)P chemical shift signal indicative of the peptide-induced membrane fragmentation was detected. Solid-state NMR results suggest that membrane fragmentation is related to peptide aggregation as the presence of Congo Red, an inhibitor of amyloid formation, prevented membrane fragmentation and the non-amyloidogenic rat-IAPP did not cause membrane fragmentation. The disappearance of membrane fragmentation at higher concentrations of hIAPP suggests an alternate kinetic pathway to fibril formation in which membrane fragmentation is inhibited.