Increasing evidence suggests that the misfolding and deposition of IAPP plays an important role in the pathogenesis of type II, or non-insulin-dependent diabetes mellitus (T2DM). Membranes have been implicated in IAPP-dependent toxicity in several ways: Lipid membranes have been shown to promote the misfolding and aggregation of IAPP. Thus, potentially toxic forms of IAPP can be generated when IAPP interacts with cellular membranes. In addition, membranes have been implicated as the target of IAPP toxicity. IAPP has been shown to disrupt membrane integrity and to permeabilize membranes. Since disruption of cellular membranes is highly toxic, such a mechanism has been suggested to explain the observed IAPP toxicity. Here, we review IAPP-membrane interaction in the context of (1) catalyzing IAPP misfolding and (2) being a potential origin of IAPP toxicity.