These studies detail the altered structure-function relationships caused by oxidation of surfactant protein B (SP-B), a mode of damage thought to be important in acute respiratory distress syndrome (ARDS), a common and frequently fatal condition. An 18-residue fragment comprising the N-terminal helix of SP-B was investigated in oxidized and unmodified forms by solution and solid-state nuclear magnetic resonance (NMR), circular dichroism (CD), and molecular dynamics (MD) simulation. Taken together, the results indicate that tryptophan oxidation causes substantial disruptions in helical structure and lipid interactions. The structural modifications induced by tryptophan oxidation were severe, with a reduction in helical extent from approximately three helical turns to, at most, one turn, and were observed in a variety of solvent environments, including sodium dodecyl sulfate (SDS) micelles, dodecyl phosphocholine (DPC) micelles, and a 40% hexafluoro-2-propanol (HFIP) aqueous solution. The unmodified peptide takes on an orientation within lipid bilayers that is tilted approximately 30° away from an in-plane position. Tryptophan oxidation causes significant modifications to the peptide-lipid interactions, and the peptide likely shifts to a more in-plane orientation within the lipids. Interestingly, the character of the disruptions to peptide-lipid interactions caused by tryptophan oxidation was highly dependent on the charge of the lipid headgroup.