The octapeptins are lipopeptide antibiotics that are structurally similar to polymyxins yet retain activity against polymyxin-resistant Gram-negative pathogens, suggesting they might be used to treat recalcitrant infections. However, the basis of their unique activity is unclear because of the difficulty in generating high-resolution experimental data of the interaction of antimicrobial peptides with lipid membranes. To elucidate these structure-activity relationships, we employed all-atom molecular dynamics simulations with umbrella sampling to investigate the conformational and energetic landscape of octapeptins interacting with bacterial outer membrane (OM). Specifically, we examined the interaction of octapeptin C4 and FADDI-115, lacking a single hydroxyl group compared with octapeptin C4, with the lipid A-phosphoethanolamine modified OM of Acinetobacter baumannii Octapeptin C4 and FADDI-115 both penetrated into the OM hydrophobic center but experienced different conformational transitions from an unfolded to a folded state that was highly dependent on the structural flexibility of their respective N-terminal fatty acyl groups. The additional hydroxyl group present in the fatty acyl group of octapeptin C4 resulted in the molecule becoming trapped in a semifolded state, leading to a higher free energy barrier for OM penetration. The free energy barrier for the translocation through the OM hydrophobic layer was ∼72 kcal/mol for octapeptin C4 and 62 kcal/mol for FADDI-115. Our results help to explain the lower antimicrobial activity previously observed for octapeptin C4 compared with FADDI-115 and more broadly improve our understanding of the structure-function relationships of octapeptins. These findings may facilitate the discovery of next-generation octapeptins against polymyxin-resistant Gram-negative 'superbugs.'