The toxicity of amyloid-forming peptides has been hypothesized to reside in the ability of protein oligomers to interact with and disrupt the cell membrane. Much of the evidence for this hypothesis comes from in vitro experiments using model membranes. However, the accuracy of this approach depends on the ability of the model membrane to accurately mimic the cell membrane. The effect of membrane composition has been overlooked in many studies of amyloid toxicity in model systems. By combining measurements of membrane binding, membrane permeabilization, and fiber formation, we show that lipids with the phosphatidylethanolamine (PE) head group strongly modulate the membrane disruption induced by IAPP (islet amyloid polypeptide protein), an amyloidogenic protein involved in type II diabetes. Our results suggest that PE lipids hamper the interaction of prefibrillar IAPP with membranes, but enhance the membrane disruption correlated with the fiber growth on the membrane surface via a detergent-like mechanism. These findings provide insights into the mechanism of membrane disruption induced by IAPP, suggesting a possible role of PE also for other amyloids involved in other pathologies.