Dynamic disorder of the lipid bilayer presents a challenge for establishing structure-function relationships in membranous systems. The resulting structural heterogeneity is especially evident for peripheral and spontaneously inserting membrane proteins, which are not constrained by the well-defined transmembrane topology and exert their action in the context of intimate interaction with lipids. Here, we propose a concerted approach combining depth-dependent fluorescence quenching with Molecular Dynamics simulation to decipher dynamic interactions of membrane proteins with the lipid bilayers. We apply this approach to characterize membrane-mediated action of the diphtheria toxin translocation domain. First, we use a combination of the steady-state and time-resolved fluorescence spectroscopy to characterize bilayer penetration of the NBD probe selectively attached to different sites of the protein into membranes containing lipid-attached nitroxyl quenching groups. The constructed quenching profiles are analyzed with the Distribution Analysis methodology allowing for accurate determination of transverse distribution of the probe. The results obtained for 12 NBD-labeled single-Cys mutants are consistent with the so-called Open-Channel topology model. The experimentally determined quenching profiles for labeling sites corresponding to L350, N373, and P378 were used as initial constraints for positioning TH8-9 hairpin into the lipid bilayer for Molecular Dynamics simulation. Finally, we used alchemical free energy calculations to characterize protonation of E362 in soluble translocation domain and membrane-inserted conformation of its TH8-9 fragment. Our results indicate that membrane partitioning of the neutral E362 is more favorable energetically (by ~ 6 kcal/mol), but causes stronger perturbation of the bilayer, than the charged E362.