The thermodynamic principles underlying the structural stability of membrane proteins are difficult to obtain directly from whole proteins because of intractable problems related to insolubility in the aqueous phase and extreme stability in the membrane phase. The principles must therefore be surmised from studies of the interactions of small peptides with lipid bilayers. This review is concerned with the hydrophobic interactions of such peptides with the interfacial regions of lipid bilayers. We first develop a general framework for thinking about the thermodynamics of membrane protein stability that centers on interfacial interactions and review the structural and chemical evidence that supports this interface-centered point of view. We then describe an experimentally determined whole-residue interfacial hydrophobicity scale that reveals the central role of the peptide bond in partitioning and folding. Finally, we consider the complexity and diversity of interfacial interactions revealed by differences between side-chain hydrophobicities determined using different classes of peptides.