The rise in multi-drug resistant Gram-negative bacterial infections has led to an increased need for 'last-resort' antibiotics such as polymyxins. However, the emergence of polymyxin-resistant strains threatens to bring about a post-antibiotic era. Thus, there is a need to develop new polymyxin-based antibiotics, but a lack of knowledge of the mechanism of action of polymyxins hinders such efforts. It has recently been suggested that polymyxins induce cell lysis of the Gram-negative bacterial inner membrane (IM) by targeting trace amounts of lipopolysaccharide (LPS) localized there. We use multiscale molecular dynamics (MD) including long-timescale coarse-grained (CG) and all-atom (AA) simulations to investigate the interactions of polymyxin B1 (PMB1) with bacterial IM models containing phospholipids (PLs), small quantities of LPS, and IM proteins. LPS was observed to (transiently) phase separate from PLs at multiple LPS concentrations, and associate with proteins in the IM. PMB1 spontaneously inserted into the IM and localized at the LPS-PL interface, where it cross-linked lipid headgroups via hydrogen bonds, sampling a wide range of interfacial environments. In the presence of membrane proteins, a small number of PMB1 molecules formed interactions with them, in a manner that was modulated by local LPS molecules. Electroporation-driven translocation of PMB1 via water-filled pores was favored at the protein-PL interface, supporting the 'destabilizing' role proteins may have within the IM. Overall, this in-depth characterization of PMB1 modes of interaction reveals how small amounts of mislocalized LPS may play a role in pre-lytic targeting and provides insights that may facilitate rational improvement of polymyxin-based antibiotics.