Two neuropeptides, substance P (SP) and SP-tyrosine-8 (SP-Y8), have been studied by molecular dynamics (MD) simulation in a TIP3P water/CCl₄ biphasic solvent system as a mimic for the water-membrane system. Initially, distance restraints derived from NMR nuclear Overhauser enhancements (NOE) were incorporated in the restrained MD (RMD) in the equilibration stage of the simulation. The starting orientation/position of the peptides for the MD simulation was either parallel to the water/CCl₄ interface or in a perpendicular/insertion mode. In both cases the peptides equilibrated and adopted a near-parallel orientation within ∼250ps. After equilibration, the conformation and orientation of the peptides, the solvation of both the backbone and the side chain of the residues, hydrogen bonding, and the dynamics of the peptides were analyzed from trajectories obtained in the RMD or the subsequent free MD (where the NOE restraints were removed). These analyses showed that the peptide backbone of nearly all residues are either solvated by water or are hydrogen-bonded. This is seen to be an important factor against the insertion mode of interaction. Most of the interactions with the hydrophobic phase come from the hydrophobic interactions of the side chains of Pro-4, Phe-7, Phe-8, Leu-10, and Met-11 for SP, and Phe-7, Leu-10, Met-11 and, to a lesser extent, Tyr-8 in SP-Y8. Concerted conformational transitions took place in the time frame of hundreds of picoseconds. The concertedness of the transition was due to the tendency of the peptide to maintain the necessary secondary structure to position the peptide properly with respect to the water/CCl₄ interface.