Understanding the structure-dynamics-function relationship is a fundamental motivation for studying how proteins fold. Over the past several decades, significant progress has been made in elucidating the folding energy landscapes and dynamics of soluble, globular proteins. In contrast, the folding kinetics and mechanisms of membrane proteins are much less studied and understood, due in part to the fact that they reside in the heterogeneous and complex membrane environment. To provide new mechanistic insights into membrane protein folding, herein we studied the folding kinetics of the influenza hemagglutinin fusion peptide (HAfp), which folds into a representative helix-turn-helix structure in model membranes. Our stopped-flow fluorescence and fluorescence resonance energy transfer (FRET) kinetics, obtained at different peptide-to-lipid ratios, support a parallel mechanism for membrane-peptide binding, wherein folding can occur either before or after membrane binding, but prior to membrane insertion. Thus, this result underscores the importance of the water-membrane interfacial region in mediating the process of folding, at least for short peptides. In turn, the association of the peptide to the interfacial region could induce local and global structural changes in the membrane. To help better characterize peptide-induced membrane structural changes as well as how cell penetrating peptides translocate across membranes, the second portion of this thesis was devoted to method development. Using two antimicrobial peptides and a cell penetrating peptide as examples, we showed that diffusion measurements via fluorescence correlation spectroscopy (FCS), can be used to `image' peptide-induced lipid domain formation in model membranes and to elucidate the mechanism of peptide translocation.