When polypeptides bind to the membrane surface, they become confined to a restricted quasi-two-dimensional space where peptide-peptide interactions become highly relevant, and the concept of a crowded medium is appropriate. Within this crowded environment interesting effects like clustering, separation of phases, cooperative alignment, and common movements occur. Here we investigated such effects by measuring distances between fluorophore-labeled peptides in the range <= 1 nm by fluorescence self-quenching. For helical peptides with dimensions of approximately 1 X 3 nm such a small "ruler" is sensitive to the packing of the labeled peptides and thereby to their molecular arrangement. A novel approach to characterize peptide-peptide interactions within membranes is presented using the designer peptide LAH4. This sequence changes membrane topology in a controlled manner being transmembrane at neutral conditions but oriented parallel to the surface at low pH. Experimental measurements of the fluorescence self-quenching of close-by chromophores and the changes that occur upon dilution with unlabeled peptides are used to analyze the peptide distribution within the membrane surface. The data show a strong effect of electrostatic interactions and under some experimental conditions clustering of the peptides. Furthermore, the results suggest that at pH 4 the peptides arrange along the membrane surface in an ordered mesophase-like arrangement.