We report on the synthesis, kinetics of proteolysis by trypsin, and morphological characterization of a novel lipidated decapeptide that spontaneously self-assembles in aqueous solutions into 0.5 mu m diameter hollow tubules and helices that range in length from tens to hundreds of micrometers depending on formation conditions. We also report on an improved method for the tritioacetylation of peptides. Tight molecular packing of the peptide-amphiphile into a crystalline bilayer array forces tight packing between peptide headgroups, which was found to significantly protect the peptides from proteolysis by trypsin. Relief of this steric hindrance between peptide headgroups caused by solubilization of the bilayer into detergent micelles accelerated the rate of trypsin hydrolysis by 32,000-fold. Raman spectroscopy and circular dichroism spectropolarimetry were used to gain molecular-level insight into the difference between hydrolysis rates. Results obtained from these studies suggest that differences in molecular packing and conformation of the peptide headgroups in crystalline tubular and dispersed micellar phases determine the extent of proteolytic protection. Protection from proteolysis is considered a useful feature of lipidated peptide tubules for their potential use as a depot of bioactive peptides and other labile prodrugs at defined biological sites for sustained release.