The capacity to form β-sheet structure and to self-organize into amyloid aggregates is a property shared by many proteins. Severe neurodegenerative pathologies such as Alzheimer's disease are thought to involve the interaction of amyloidogenic protein oligomers with neuronal membranes. To understand the experimentally observed catalysis of amyloid formation by lipid membranes and other water-hydrophobic interfaces, we examine the physico-chemical basis of peptide adsorption and aggregation in a model membrane using atomistic molecular simulations. Blocked octapeptides with simple, repetitive sequences, (Gly-Ala)4, and (Gly-Val)4, are used as models of β-sheet-forming polypeptide chains found in the core of amyloid fibrils. In the presence of an n-octane phase mimicking the core of lipid membranes, the peptides spontaneously partition at the octane-water interface. The adsorption of nonpolar sidechains displaces the peptides' conformational equilibrium from a heterogeneous ensemble characterized by a high degree of structural disorder toward a more ordered ensemble favoring β-hairpins and elongated β-strands. At the interface, peptides spontaneously aggregate and rapidly evolve β-sheet structure on a 10 to 100 ns time scale, while aqueous aggregates remain amorphous. Catalysis of β-sheet formation results from the combination of the hydrophobic effect and of reduced conformational entropy of the polypeptide chain. While the former drives interfacial partition and displaces the conformational equilibrium of monomeric peptides, the planar interface further facilitates β-sheet organization by increasing peptide concentration and reducing the dimensionality of self-assembly from three to two. These findings suggest a general mechanism for the formation of β-sheets on the surface of globular proteins and for amyloid self-organization at hydrophobic interfaces. Proteins 2010. © 2010 Wiley-Liss, Inc.