Kalata B1 (kB1), a naturally occurring cyclotide has been shown experimentally to bind lipid membranes that contain phosphatidylethanolamine (PE) phospholipids. Here, molecular dynamics simulations were used to explore its interaction with two phospholipids, palmitoyloleoylphosphatidylethanolamine (POPE), palmitoyloleoylphosphatidylcholine (POPC), and a heterogeneous membrane comprising POPC/POPE (90:10), to understand the basis for the selectivity of kB1 towards PE phospholipids. The simulations showed that in the presence of only 10 % POPE lipid, kB1 forms a stable binding complex with membrane bilayers. An ionic interaction between the E7 carboxylate group of kB1 and the ammonium group of PE headgroups consistently initiates binding of kB1 to the membrane. Additionally, stable noncovalent interactions such as hydrogen bonding (E7, T8, V10, G11, T13 and N15), cation-π (W23), and CH-π (W23) interactions between specific residues of kB1 and the lipid membrane play an important role in stabilizing the binding. These findings are consistent with a structure-activity relationship study on kB1 where lysine mutagenesis on the bioactive and hydrophobic faces of the peptide abolished membrane-dependent bioactivities. In summary, our simulations suggest the importance of residue E7 (in the bioactive face) in enabling kB1 to recognize and bind selectively to PE-containing phospholipids bilayers through ionic and hydrogen bonding interactions, and of W23 (in the hydrophobic face) for the association and insertion of kB1 into the lipid bilayer through cation-π and CH-π interactions. Overall, this work enhances our understanding of the molecular basis of the membrane binding and bioactivity of this prototypic cyclotide.