The aggregation of human islet amyloid polypeptide (hIAPP or amylin) is associated with the pathogenesis of type 2 diabetes mellitus. Increasing evidence suggests that the interaction of hIAPP with β-cell membranes plays a crucial role in cytotoxicity. However, the hIAPP-lipid interaction and subsequent membrane perturbation is not well understood at atomic level. In this study, as a first step to gain insight into the mechanism of hIAPP-induced cytotoxicity, we have investigated the detailed interactions of hIAPP monomer and dimer with anionic palmitoyloleolyophosphatidylglycerol (POPG) bilayer using all-atom molecular dynamics (MD) simulations. Multiple MD simulations have been performed by employing the initial configurations where the N-terminal region of hIAPP is pre-inserted in POPG bilayer. Our simulations show that electrostatic interaction between hIAPP and POPG bilayer plays a major role in peptide-lipid interaction. In particular, the N-terminal positively-charged residues Lys1 and Arg11 make a dominant contribution to the interaction. During peptide-lipid interaction process, peptide dimerization occurs mostly through the C-terminal 20–37 region containing the amyloidogenic 20–29-residue segment. Membrane-bound hIAPP dimers display a pronounced ability of membrane perturbation than monomers. The higher bilayer perturbation propensity of hIAPP dimer likely results from the cooperativity of the peptide-peptide interaction (or peptide aggregation). This study provides insight into the hIAPP-membrane interaction and the molecular mechanism of membrane disruption by hIAPP oligomers.