The mechanism of interfacial folding and membrane insertion of designed peptides is explored by using an implicit membrane generalized Born model and replica-exchange molecular dynamics. Folding/insertion simulations initiated from fully extended peptide conformations in the aqueous phase, at least 28 A away from the membrane interface, demonstrate a general mechanism for structure formation and insertion (when it occurs). The predominately hydrophobic peptides from the synthetic WALP and TMX series first become localized at the membrane-solvent interface where they form significant helical secondary structure via a helix-turn-helix motif that inserts the central hydrophobic residues into the membrane interior, and then fluctuations occur that provide a persistent helical structure throughout the peptide and it inserts with its N-terminal end moving across the membrane. More specifically, we observed that: (i) the WALP peptides (WALP16, WALP19, and WALP23) spontaneously insert in the membrane as just noted; (ii) TMX-1 also inserts spontaneously after a similar mechanism and forms a transmembrane helix with a population of approximately 50% at 300 K; and (iii) TMX-3 does not insert, but exists in a fluctuating membrane interface-bound form. These findings are in excellent agreement with available experimental data and demonstrate the potential for new implicit solvent/membrane models together with advanced simulation protocols to guide experimental programs in exploring the nature and mechanism of membrane-associated folding and insertion of biologically important peptides.