Vancomycin, LY264826 and four N-substituted derivatives of LY264826 were examined for dimerization, binding to D-alanyl-D-alanine- and D-alanyl-D-lactate-containing cell wall ligands, and binding to bacterial membrane vesicles. The six glycopeptide antibiotics represent a 360-fold range in antibacterial activities against Micrococcus luteus (MIC = 0.00072 - 0.26 μM) with the N-substituted compounds having the lowest MICs. Vancomycin, LY264826 and the four N-substituted derivatives shared nearly identical binding affinities for N, N'-diacetyl-L-lysyl-D-alanyl-D-alanine (Kb=1.5×10⁵-5.9×10⁵M^-1). Affinities for binding N, N'-diacetyl-L-lysyl-D-alanyl-D-lactate were lower but also represented a narrow range (K_b = 0.24×10³-1.6×10³M^-1). In contrast to ligand binding, the relative capacity of the six compounds to dimerize differed by four orders of magnitude (K_dim = 4.9×10¹-1.2×10⁶M^-1). The N-substituted derivatives had the highest K_dim values, required the greatest molar excess of exogenous cell wall ligand to suppress inhibition, and demonstrated a propensity to bind to bacterial membrane vesicles. The derivatives with the most lipophilic side chains were the most highly bound to vesicles. The findings suggest that the enhanced antibacterial activities of N-substituted derivatives of LY264826 derive from the nature of the hydrophobic side chain which can have a marked effect on dimerization and membrane binding.