Protein membrane interactions play an important role in our understanding of diverse phenomena ranging from membrane-assisted protein aggregation to oligomerization and folding. Pore-forming toxins (PFTs) are the primary vehicle for infection by several strains of bacteria. These proteins which are expressed in a water-soluble form (monomers) bind to the target membrane and conformationally transform (protomers) and self-assemble to form a multimer transmembrane pore complex through a process of oligomerization. On the basis of the structure of the transmembrane domains, PFTs are broadly classified into beta or alpha toxins. In contrast to beta-PFTs, the paucity of available crystal structures coupled with the amphipathic nature of the transmembrane domains has hindered our understanding of alpha-PFT pore formation. In this article, we use molecular dynamics (MD) simulations to examine the process of pore formation of the bacterial alpha-PFT, cytolysin A from Escherichia coli (ClyA) in lipid bilayer membranes. Using atomistic MD simulations ranging from 50 to 500 ns, we show that transmembrane oligomeric intermediates or "arcs" form stable proteolipidic complexes consisting of protein arcs with toroidal lipids lining the free edges. By creating initial conditions where the lipids are contained within the arcs, we study the dynamics of spontaneous lipid evacuation and toroidal edge formation. This process occurs on the time scale of tens of nanoseconds, suggesting that once protomers oligomerize, transmembrane arcs are rapidly stabilized to form functional water channels capable of leakage. Using umbrella sampling with a coarse-grained molecular model, we obtain the free energy of insertion of a single protomer into the membrane. A single inserted protomer has a stabilization free energy of -52.9 +/- 1.2 kJ/mol and forms a stable transmembrane water channel capable of leakage. Our simulations reveal that arcs are stable and viable intermediates that can occur during the pore-formation pathway for ClyA.