A molecular dynamics investigation of lipid bilayer perturbation by PIP₂ Abstract: Phosphoinositides like PIP₂ are negatively charged lipids that play a pivotal role in membrane trafficking, signal transduction and protein anchoring. We designed a force field for the PIP₂ head group with quantum mechanical methods and characterize its properties inside a lipid bilayer using molecular dynamics simulations. Macroscopic properties such as area per head group, density profiles, and lipid order parameters calculated from these simulations agree well with the experimental values. However, microscopically, the PIP₂ introduces a local perturbation of the lipid bilayer. The average PIP₂ head group orientation of 45^o to the bilayer normal induces a unique, distance dependent organization of the lipids that surround PIP₂. The head groups of these lipids preferentially oriented closer to the bilayer normal. This perturbation creates a PIP₂ lipid microdomain with the neighboring lipids. We propose that the PIP₂ lipid microdomain enables the PIP₂ to function as a membrane bound anchoring molecule.