The degree of interaction of the lipid bilayer of a dipalmitoylphosphatidylcholine (DPPC) vesicle with poly(ethylene glycol) (PEG) was studied by determining electron spin resonance (ESR) line widths of nitroxide spin probes and measuring interaction distances between nitroxide groups in the hydrophobic core region and interface water (D2O) with electron spin-echo modulation(ESEM). The increasing ESR line width with increasing concentration of PEG up to 10 mM indicates that the PEG intercalates between the headgroups of the DPPC vesicle due to hydrophobic interaction with surfactant alkyl chains. This action of PEG is also reflected in increased deuterium modulation depths of the ESEM spectra. Thereafter, some interface water (D2O) is replaced by PEG molecules with increasing concentration of PEG at DPPC interface. This interpretation is supported by the decreased deuterium modulation depth up to 10 mM of PEG and slightly decreased deuterium modulation depth thereafter.