We have studied the effect of melittin, a basic membrane-binding peptide, on Ca-ATPase activity and on protein and lipid dynamics in skeletal sarcoplasmic reticulum (SR), using time-resolved phosphorescence and fluorescence spectroscopy. Melittin completely inhibits Ca-ATPase activity, with half-maximal inhibition at 9 ± 1 mol of melittin bound to the membrane per mole of ATPase (0.1 mol of melittin per mole of lipid). The time-resolved phosphorescence anisotropy (TPA) decay of the Ca-ATPase labeled with erythrosin isothiocyanate (ERITC) shows that melittin restricts microsecond protein rotational motion. At 25 °C in the absence of melittin, the TPA is characterized by three decay components, corresponding to a rapid segmental motion (correlation time ϕ1 = 2–3 μs), the uniaxial rotation of monomers or dimers (ϕ2 = 16–22 μs), and the uniaxial rotation of larger oligomers (ϕ3 = 90-140 μs). The effect of melittin is primarily to decrease the fraction of the more mobile monomer/dimer species (A2) while increasing the fractions of the larger oligomer (A3) and very large aggregates (A∞). Time-resolved fluorescence anisotropy of the lipid-soluble probe diphenylhexatriene (DPH) shows only a slight increase in the lipid hydrocarbon chain effective order parameter, corresponding to an increase in lipid viscosity that is too small to account for the large decrease in protein mobility or inhibition of Ca-ATPase activity. Thus the inhibitory effect of melittin correlates with its capacity to aggregate the Ca-ATPase and is consistent with previously reported inhibition of this enzyme under conditions that increase protein-protein interactions. The ionic strength dependence of melittin’s effects were investigated and compared with those of polylysine. These results suggest that the ability of melittin to both inhibit and immobilize the Ca-ATPase cannot be accounted for by electrostatic interactions alone, as can those of polylysine, but that a substantial component of melittin’s effect on the enzyme can be attributed to hydrophobic interactions of melittin with the membrane.