A detailed treatment is provided of the various free-energy terms that contribute to the transfer of a polyalanine α-helix from the aqueous phase into lipid bilayers. In agreement with previous work, the hydrophobic effect is found to provide the major driving force for helix insertion. However, an opposing effect of comparable magnitude is also identified and is attributed to the large free-energy penalty associated with the desolvation of peptide hydrogen bonds on transfer to the low dielectric environment of the bilayer. Lipid perturbation effects as well as the entropy loss associated with helix immobilization in the bilayer are also evaluated. Two configurations of a membrane-bound 25mer polyalanine helix were found to be lower in free energy than the isolated helix in the aqueous phase. The first corresponds to the case of vertical insertion, in which a helix terminus protrudes from each side of the bilayer. The second minimum is for the case of horizontal insertion, for which the helix is adsorbed upon the surface of the bilayer. The calculated free-energy minima are found to be in good agreement with recent measurements of related systems. Large free-energy barriers resulting from desolvation of unsatisfied hydrogen-bonding groups at the helix termini are obtained for both insertion processes. The barriers for insertion are significantly reduced if the helix termini are assumed to be 'capped' through the formation of hydrogen bonds with polar sidechains. For uncapped helices, our results support recently proposed models in which helices are inserted by first adsorbing on the membrane surface and then having one terminus 'swing around' so as to penetrate the bilayer.