SP-B(8-25) is a synthetic peptide comprising the N-terminal helix of the essential lung surfactant protein SP-B. Rat lung oxygenation studies have shown that SP-B(8-25) retains some of the function of full-length SP-B. We have used deuterium nuclear magnetic resonance ((2)H-NMR) to examine the influence of SP-B(8-25) on the mixing properties of saturated PC and unsaturated PG lipids in model mixed lipid bilayers containing dipalmitoylphosphatidylcholine (DPPC) and palmitoyl-oleoyl-phosphatidylglycerol (POPG), in a molar ratio of 7:3. In the absence of the peptide, (2)H-NMR spectra of DPPC/POPG mixtures, with one or the other lipid component deuterated, indicate coexistence of large liquid crystal and gel domains over a range of about 10 degrees C through the liquid crystal to gel transition of the bilayer. Addition of SP-B(8-25) has little effect on the width of the transition but the spectra through the transition range cannot be resolved into distinct liquid crystal and gel spectral components suggesting that the peptide interferes with the tendency of the DPPC and POPG lipid components in this mixture to phase separate near the bilayer transition temperature. Quadrupole echo decay observations suggest that the peptide may also reduce differences in the correlation times for local reorientation of the two lipids. These observations suggest that SP-B(8-25) promotes a more thorough mixing of saturated PC and unsaturated PG components and may be relevant to understanding the behaviour of lung surfactant material under conditions of lateral compression which might be expected to enhance the propensity for saturated and unsaturated surfactant lipid components to segregate.