Melittin is a cationic hemolytic peptide isolated from the European honey bee, Apis mellifera. The organization of membrane-bound melittin has earlier been shown to be dependent on the physical state and composition of membranes. In this study, we covalently labeled the N-terminal (Gly-1) and Lys-7 of melittin with an environment-sensitive fluorescent probe, the NBD group, to monitor the influence of negatively charged lipids and cholesterol on the organization and dynamics of membrane-bound melittin. Our results show that the NBD group of melittin labeled at its N-terminal end does not exhibit red edge excitation shift in DOPC and DOPC/DOPG membranes, whereas the NBD group of melittin labeled at Lys-7 exhibits REES of ∼8nm. This could be attributed to difference in membrane microenvironment experienced by the NBD groups in these analogs. Interestingly, the membrane environment of the NBD groups is sensitive to the presence of cholesterol, which is supported by time-resolved fluorescence measurements. Importantly, the orientation of melittin is found to be parallel to the membrane surface as determined by membrane penetration depth analysis using the parallax method in all cases. Our results constitute the first report to our knowledge describing the orientation of melittin in cholesterol-containing membranes. These results assume significance in the overall context of the role of membrane lipids in the orientation and function of membrane proteins and peptides.