Beta-barrel membrane proteins occur in the outer membranes of Gram-negative bacteria, mitochondria and chloroplasts. The membrane-spanning sequences of beta-barrel membrane proteins are less hydrophobic than those of alpha-helical membrane proteins, which is probably the main reason why completely different folding and membrane assembly pathways have evolved for these two classes of membrane proteins. Some beta-barrel membrane proteins can be spontaneously refolded into lipid bilayer model membranes in vitro. They may also have this ability in vivo although lipid and protein chaperones likely assist with their assembly in appropriate target membranes. This review summarizes recent work on the thermodynamic stability and the mechanism of membrane insertion of beta-barrel membrane proteins in lipid model and biological membranes. How lipid compositions affect folding and assembly of beta-barrel membrane proteins is also reviewed. The stability of these proteins in membranes is not as large as previously thought (<10 kcal/mol) and is modulated by elastic forces of the lipid bilayer. Detailed kinetic studies indicate that beta-barrel membrane proteins fold in distinct steps with several intermediates that can be characterized in vitro. Formation of the barrel is synchronized with membrane insertion and all beta-hairpins insert simultaneously in a concerted pathway.