Islet amyloid polypeptide (IAPP) is responsible for cell depletion in the pancreatic islets of Langherans, and for multiple pathological consequences encountered by patients suffering from type 2 Diabetes Mellitus. We have examined the amyloidogenicity and cytotoxic mechanisms of this peptide by investigating model-membrane permeation and structural effects of fragments of the human IAPP and several rat IAPP mutants. In vitro experiments and molecular dynamics simulations reveal distinct physical segregation, membrane permeation, and amyloid aggregation processes that are mediated by two separate regions of the peptide. These observations suggest a "detergent-like" mechanism, where lipids are extracted from the bilayer by the N-terminus of IAPP, and integrated into amyloid aggregates. The amyloidogenic aggregation would kinetically compete with the process of membrane permeation and, therefore, inhibit it. This hypothesis represents a new perspective on the mechanism underlying the membrane disruption by amyloid peptides, and could influence the development of new therapeutic strategies.