We have produced a small antimicrobial peptide PFWRIRIRR in bacteria utilizing production in the form of insoluble fusion protein with ketosteroid isomerase. The recombinant peptide was rapidly and efficiently isolated by acidic cleavage of the fusion protein based on the acid labile Asp-Pro bond at the N-terminus of the peptide. The peptide has antibacterial activity and neutralizes macrophage activation by LPS. The selectivity of the peptide against bacteria correlates with preferential binding to acidic phospholipid vesicles. Solution structure of the peptide in SDS and DPC micelles was determined by NMR. The peptide adopts a well-defined structure, comprising a short helical segment. Cationic and hydrophobic clusters are segregated along the molecular axis of the short helix, which is positioned perpendicular to the membrane plane. The position of the helix is shifted in two micellar types and more nonpolar surface is exposed in anionic micelles. Overall structure explains the advantageous role of the N-terminal proline residue, which forms an integral part of the hydrophobic cluster.