It is widely recognized that to be biologically functional proteins have to be folded into specific structures and that loss of structure leads to loss of function. Recent studies have demonstrated that in some cases structural alterations not only lead to loss of function, but can actually convert a protein into a cytotoxic form. This process features in a number of devastating human diseases including Alzheimer’s disease, Parkinson’s disease, mad cow disease and type-2 diabetes, to mention a few. In all these diseases a specific protein or peptide is structurally modified and aggregates to form oligomeric species that bind to, and damage, cell membranes leading to cell death. Current research in our laboratory aims to characterize the molecular origin of this toxicity in the amyloid beta peptide, associated with Alzheimer’s disease, and the islet amyloid peptide associated with type-2 diabetes. We focus on characterizing the structural alterations and molecular interactions that lead to the development of membrane-bound aggregates of these proteins, and on the mechanism by which these species induce cell death. Our elucidation of the structural evolution and membrane interactions of these proteins is accomplished using a variety of molecular-biological, biochemical and biophysical approaches. Laser-based optical spectroscopic techniques, and in particular time-resolved fluorescence, Forster resonance energy transfer circular dichroism and light scattering are used to follow protein conformational changes and aggregation in real time and serve in the development and testing of strategies for the inhibition of toxicity. Of special importance to our studies is the application of single molecule microscopy. This technique allows us to work with very low protein concentrations, as found in vivo, and to obtain unprecedented resolving power by following the interactions of individual peptide oligomers with membranes of live cells. We are using single molecule microscopy to address mechanistic details of the origin and evolution of cytotoxicity at a level of detail that is impossible to achieve by conventional experimental approaches.