The time-resolved parallel artificial membrane permeability assay with fluorescence detection and comprehensive computer simulations are used to study the passive permeation of three aromatic dipeptides—N-acetyl-phenylalanineamide (NAFA), N-acetyltyrosineamide (NAYA), and N-acetyl-tryptophanamide (NATA) through a 1,2-dioleoyl-sn-glycero-3-phospocholine (DOPC) lipid bilayer. Measured permeation times and permeability coefficients show fastest translocation for NAFA, slowest for NAYA, and intermediate for NATA under physiological temperature and pH. Computationally, we perform umbrella sampling simulations to model the structure, dynamics, and interactions of the peptides as a function of z, the distance from lipid bilayer. The calculated profiles of the potential of mean force show two strong effects—preferential binding of each of the three peptides to the lipid interface and large free energy barriers in the membrane center. We use several approaches to calculate the position-dependent translational diffusion coefficients D(z), including one based on numerical solution the Smoluchowski equation. Surprisingly, computed D(z) values change very little with reaction coordinate and are also quite similar for the three peptides studied. In contrast, calculated values of sidechain rotational correlation times τrot(z) show extremely large changes with peptide membrane insertion—values become 100 times larger in the headgroup region and 10 times larger at interface and in membrane center, relative to solution. The peptides’ conformational freedom becomes systematically more restricted as they enter the membrane, sampling α and β and C7eq basins in solution, α and C7eq at the interface, and C7eq only in the center. Residual waters of solvation remain around the peptides even in the membrane center. Overall, our study provides an improved microscopic understanding of passive peptide permeation through membranes, especially on the sensitivity of rotational diffusion to position relative to the bilayer.