Peptoids are an alternative approach to antimicrobial peptides that offer higher stability towards enzymatic degradation. It is essential when developing new types of peptoids, that mimic the function of antimicrobial peptides, to understand their mechanism of action. Few studies on the specific mechanism of action of antimicrobial peptoids have been described in the literature, despite the plethora of studies on the mode of action of antimicrobial peptides. Here, we investigate the mechanism of action of two short cationic peptoids, rich in lysine and tryptophan side chain functionalities. We demonstrate that both peptoids are able to cause loss of viability in E. coli susceptible cells at their MIC (16–32 μg/ml) concentrations. Dye leakage assays demonstrate slow and low membrane permeabilization for peptoid 1, that is still higher for lipid compositions mimicking bacterial membranes than lipid compositions containing Cholesterol. At concentrations of 4 × MIC (64–128 μg/ml), pore formation, leakage of cytoplasmic content and filamentation were the most commonly observed morphological changes seen by SEM in E. coli treated with both peptoids. Flow cytometry data supports the increase of cell size as observed in the quantification analysis from the SEM images and suggests overall decrease of DNA per cell mass over time.