The aim of this study is to investigate the interaction of a drug (Piroxicam, 4-hydroxy-2-methyl-N-(2-pyridinyl)-2H-1,2-benzothiazine-3-carboxamide 1,1 dioxide) with a lipid (DMPC) monolayer used as a membrane-mime in terms of drug-induced changes in stability and compressibility with variation in temperature, surface-pressure, drug-dose and ionic states of the monolayers. Drug-induced fluidization is noticed in the π−A isotherms through increase in phase-transition pressure at constant temperature. The long-term dynamics of the lipid-monolayer is characterized by algebraic decays in surface-energy E with time t, E∼t−p1,2,3, with an initial decay exponent p1 that changes to p2 after ∼1000s, and, at high surface pressures and/or drug-dose, to a third exponent p3 after ∼3500s, suggesting structural reorganizations in the monolayer. With increasing drug–lipid ratio (D/L), p1 shows a decrease ending at an almost constant value after 0.05, p2 shows an almost negligible lowering while p3 shows a monotonic and considerable increase. The reorganization is summarized by proposing two mechanisms: (a) ‘charging–discharging’ where drug-molecules sitting parallel to the interface increase headgroup separations and (b) ‘discharging–charging’ where drug-molecules sitting roughly perpendicular to the interface bring headgroups closer. Drug-induced softening of lipid-monolayers is characterized by the compressibilites of pure and mixed lipid monolayers. Compressibility-change (i.e., compressibility difference between drug/lipid and pure lipid monolayer) with pressure is maximum in the LE–LC transition zone and compressibility-change with drug-dose reveals an optimum dose of drug for maximum increase in compressibility. Molecular dynamics simulation shows that the ordering in the different parts of the lipid chains is changed to different extents in the presence of drugs with maximum change near the headgroups and again points to an optimum dose for maximum disorder.