The CXC chemokine receptor 1 (CXCR1) is an important member of the G protein-coupled receptor (GPCR) family in which the extracellular N-terminal domain has been implicated in ligand binding and selectivity. The structure of this domain has not yet been elucidated due to its inherent dynamics, but experimental evidence points toward membrane-dependent organization and dynamics. To gain molecular insight into the interaction of the N-terminal domain with the membrane bilayer, we performed a series of microsecond time scale atomistic simulations of the N-terminal domain of CXCR1 in the presence and absence of POPC bilayers. Our results show that the peptide displays a high propensity to adopt a beta-sheet conformation in the presence of the membrane bilayer. The interaction of the peptide with the membrane bilayer was found to be transient in our simulations. Interestingly, a scrambled peptide, containing the same residues in a randomly varying sequence, did not exhibit membrane-modulated structural dynamics. These results suggest that sequence-dependent electrostatics, modulated by the membrane, could play an important role in folding of the N-terminal domain. We believe that our results reinforce the emerging paradigm that cellular membranes could be important modulators of function of G protein-coupled receptors such as CXCR1.