Aggregation behavior of three N-acyl peptide surfactants, sodium N-(4-n-dodecyloxybenzoyl)-L-alyl-L-valinate (SDBAV), L-valyl-L-alaninate (SDBVA), and L-valyl-L-valinate (SDBVV), were investigated. The amphiphiles have very low critical aggregation concentration (cac). Fluorescence anisotropy studies using 1,6-diphenyl-1,3,5-hexatriene (DPH) as a fluorescent probe indicated formation of bilayer aggregates in dilute solution. Transmission electron micrographs showed the existence of large vesicles in dilute solution. Circular dichroism spectra suggested formation of helical aggregates. The vesicle formation was found to be more favored at neutral pH. Dynamic light scattering was used to measure hydrodynamic radius of the vesicles. The microviscosity of the vesicles formed by the amphiphiles was determined by use of fluorescence anisotropy and the lifetime of the DPH probe. The vesicles formed by the surfactants are stable at temperatures above body temperature and for a long period of time. Fluorescence probe studies, however, indicated transformation of vesicles to rod-like micelles at surfactant concentrations much higher than the cac value. Addition of sodium chloride also transformed the vesicles to rod-like micelles.