We report molecular dynamics simulation of fully hydrated lipid bilayer of dimyristoyl phosphatidyl choline (DMPC) at room temperature with ganglioside GM1 attached to it in the upper layer under periodic boundary conditions. The simulation results indicate that the presence of a single GM1 molecule has local effects on the bilayer. Three sugar residues (GalNAc-Gal-Glc) of the pentasaccharide head group of GM1 remain on the lipid surface where as the NeuNAc residue extends out in the aqueous layer. The radial distribution functions suggest ordering of water molecules near the glycerol and carboxyl group of the sialic acid in the upper layer. One of the ceramide chains of GM1, the sphingosine chain, folds up and is stacked under the sugar residues lying on the surface. The other ceramide chain is inserted into the lipid bilayer. The arrangement of the polar head group as well as the acyl chains of the lipids which are immediate neighbours of the GM1 are modified compared to the non-neighbour ones and others at the lower layer. The time average conformation of GM1-pentasaccharide is stabilized by a number of inter residue hydrogen bonds that were observed experimentally. The trajectory average conformation of GM1-pentasaccharide was docked on to the cholera toxin molecule and the minimized complex reveals alternative binding modes between the toxin and the GM1-pentasaccharide moiety. The results of these simulation studies might help to understand the structure and nature of the effects of GM1 on the membrane at atomic resolution.