Binding of amphiphilic molecules to supported lipid bilayers (SLBs) often results in lipid fibril extension from the SLBs. Previous studies proposed that amphiphiles with large and flexible hydrophilic regions trigger lipid fibril formation in SLBs by inducing membrane curvature via their hydrophilic regions. However, no experimental studies have verified this mechanism of fibril formation. In this work, we investigated the binding of lipopolysaccharide (LPS) and cholesterol-modified gelatin to SLBs using fluorescence microscopy. SLBs with restricted and unrestricted bilayer areas were employed to identify the mechanism of fibril generation. We show that the main cause of lipid fibril formation is an approximately 20% expansion in the bilayer area rather than increased membrane curvature. The data indicate that bilayer area confinement plays a critical role in morphological changes of SLBs even when bound amphiphilic molecules have a large hydrophilic domain. We also show that bilayer area change after LPS insertion is dependent on the patch shape of the SLB. When an SLB patch consists of a broad bilayer segment connected to a long thin streak, bilayer area expansion mainly occurs within the bilayer streak. The results indicate that LPS insertion causes net lipid flow from the broad bilayer region to the streak area. The differential increase in area is explained by the instability of planar bilayer streaks that originate from the large energetic contribution of line tension arising along the bilayer edge.