Antibiotic resistant bacterial strains represent a global health problem with a strong social and economic impact. Thus, there is an urgent need for the development of antibiotics with novel mechanisms of action. There is currently an extensive effort to understand the mode of action of antimicrobial peptides which are considered as one alternative to classical antibiotics. The main advantage of this class of substances, when considering bacterial resistance, is that they rapidly, within minutes, kill bacteria. Antimicrobial peptides can be found in every organism and display a wide spectrum of activity. Hence, the goal is to engineer peptides with an improved therapeutic index, i.e. high efficacy and target specificity. For the rational design of such novel antibiotics it is essential to elucidate the molecular mechanism of action. Biophysical studies have been performed using to a large extent membrane model systems demonstrating that there are distinctive different mechanisms of bacterial killing by antimicrobial peptides. One can distinguish between peptides that permeabilize and/or disrupt the bacterial cell membrane and peptides that translocate through the cell membrane and interact with a cytosolic target. Lantibiotics exhibit specific mechanisms, e.g. binding to lipid II, a precursor of the peptidoglycan layer, either resulting in membrane rupture by pore formation or preventing cell wall biosynthesis. The classical models of membrane perturbation, pore formation and carpet mechanism, are discussed and related to other mechanisms that may lead to membrane dysfunction such as formation of lipid-peptide domains or membrane disruption by formation of non-lamellar phases. Emphasis is on the role of membrane lipid composition in these processes and in the translocation of antimicrobial peptides.