Using synchrotron grazing-incidence X-ray diffraction (GIXD) and reflectivity (XR), we have determined the in-plane and out-of-plane structure of phospholipid monolayers at the air-water interface as a function of hydrophilic lipid headgroup size. Di-stearoyl-phosphatidyl-ethanolamine (DSPE) lipid monolayers were systematically modified by chemically grafting hydrophilic poly(ethylene glycol) (PEG) chains of MW = 90 g/mol (2 ethylene oxide, EO, units), MW = 350 g/mol (8 EO units), and MW = 750 g/mol(17 EO units) to the lipid headgroups. The monolayers were studied in the solid phase at a surface pressure of 42 mN/m. At these high lipid packing densities, the PEG chains are submerged in the water subphase. The increased packing stresses from these bulky polymer headgroups distort the unit cell and the in-plane packing modes of the monolayers, leading to large out-of-plane alterations and staggering of the lipid molecules. Surprisingly, a change in the molecular packing of the monolayer toward higher packing densities (lower area per molecule) was observed on increasing the PEG MW to 750 g/mol (17 EO units). This rearrangement of the monolayer structure may be due to a conformational change in the PEG chains.