One of the most extraordinary men—tycoon, visionary, knight, and founder of Virgin Airlines—opens up about the world as he sees it today and the remarkable foundation he's just launched to help give peace a chance.

In 1966, a British 16-year-old who had dyslexia and was nearly flunking out of school put his education on hold to start a youth-culture magazine called Student, which he hoped would one day become England's version of Rolling Stone. To finance it, he skipped the usual teenage jobs like store clerk and instead sold advertising space in the magazine; from there, he launched a mail-order record business and opened a music shop on London's Oxford Street.

The magazine did well enough, but 41 years later, those side projects have become the multimillion-dollar conglomerate the world knows as Virgin, the company whose business ventures encompass music, air travel, publishing, and retailing. And the ambitious teenager is now Virgin's charismatic leader, 57-year-old Sir Richard Branson (he was knighted in 1999).

His newest, and greatest, idea is a modest humanitarian proposal: to save the world. Branson and his friend Peter Gabriel, the British rock star, have assembled a council of 12 internationally renowned statesmen and women whose goal is to stop wars, promote peace, stamp out diseases, and curb global warming. Called the Elders, the group is privately funded to avoid becoming beholden to any political or special-interest party. It will be chaired by Archbishop Desmond Tutu.

"Most wars are completely unnecessary," Branson tells me on the afternoon of our conversation. "Intelligent people must come up with alternative ways to disagree." For a man whose optimistic outlook led him to attempt the improbable four decades ago, the Elders is a fledgling investment that could bring an extraordinary return: the possibility of long-standing world peace.

Oprah: What's the source of your drive to contribute to the world? It feels like an extraordinary force.

Richard: [Laughs] If anybody knows about that force, you do! I love creating things, and as an entrepreneur, I've taken on quite a lot of major corporations and done well. Capitalism is the only system that works, but it has its flaws; for one, it brings great wealth to only a few people. That wealth obviously brings extreme responsibility.

Oprah: That's not so obvious. You could decide to play all day: fly balloons, race around the world, stretch out on an island and drink tequila.

Richard: True. In part, giving back has to do with the way I was brought up and the fact that I've traveled widely and seen terrible situations in the world. To sleep well at night, those of us who are in a position to help must address these situations. I'd get far greater satisfaction out of, say, walking into a hospital I'd built in South Africa than I would by sitting on a beach. I'm fortunate enough to be in a position to make a difference, and I don't want to waste that. I suspect I was also lucky to have parents who drove me from a young age.

Oprah: Did your parents inspire your creativity and courage?

Richard: They certainly encouraged it. They're also good examples of it. My mother has done everything from belly dancing to climbing mountaintops, and in her late 80s, she hasn't slowed down. She spends a lot of time with the Berbers in Morocco, teaching them English. We're still a very close family, and that closeness has given me lots of strength. My parents travel with me wherever I go. They were with me at the first Elders conference in South Africa.

Oprah: Where did the idea for the Elders come from?

Richard: In Africa, villagers look up to elders; they are the moral voice of their community. My friend Peter Gabriel and I felt that the world needed a group of wise leaders to look up to—men and women who are beyond ego, who can look past their borders and take on global issues. That's why we created the Elders—a group of 12 respected people who can intervene in the world's conflicts. Before the Iraq war, I was involved in attempting to avert the conflict. I felt that the only way it could be stopped would be for an elder of great stature to persuade Saddam Hussein to step down and go live elsewhere, in Libya or Saudi Arabia—the same way Idi Amin [the late Ugandan dictator and president] was persuaded to step down. I had hoped we could avoid maiming and killing thousands of people and all the misery to follow. Nelson Mandela seemed to be the obvious elder to do that, since he'd already spoken out against the war. I talked to him, and he agreed to see Saddam if Kofi Annan [former secretary-general of the United Nations] would go with him and if South African president Thabo Mvuyelwa Mbeki gave his blessing. A week later, both agreed, but that same week, the bombing began. So the conversation between Hussein and Mandela never took place.

Oprah: Did you ever wonder what might have happened if the conversation had been initiated just one week sooner?

Richard: I don't live my life thinking about "if only." I just try to think positively about the future. We'll never know for certain what would have happened if we'd gone to Iraq. The important thing is that we've got to do everything we can to prevent other wars. Peter and I created the Elders because we want leaders to arbitrate in conflict situations like the one between the Algeria-supported Polisaro Front and Morocco over the Western Sahara, or the crisis in Darfur. We all know about the big world conflicts: Israel and Palestine, Zimbabwe, and so on. But there are smaller conflicts that aren't even on the world's radar screen; most of the world has no idea that Ethiopia invaded Somalia a year ago. It makes sense for the Elders to sit down with both sides and see whether leaders can come to an understanding. Ten days from now, we're going to the Sudan.

Oprah: Which of the Elders are going?

Richard: Archbishop Desmond Tutu, Jimmy Carter, and [former First Lady of South Africa] Graça Machel. [Former United Nations envoy] Lakhdar Brahimi will join them. The group will meet with both the government and the opposition in the capital city of Khartoum. They'll then travel to Darfur and visit local community leaders. They hope to strengthen the framework for assuring permanent peace in Sudan.

Oprah: Will you be there?

Richard: Yes—but I'm going so that I can observe and learn. As individuals, each of the Elders has the potential to stop wars; collectively, these 12 men and women are powerful. When someone like Nelson Mandela or Kofi Annan is on the phone, people will take that call.

Oprah: What is your ultimate hope and expectation for the Elders?

Richard: I'd love for the Elders to still be around in a thousand years' time. I want to see the group build credibility in the world. I'd also like them to address other major issues, like global warming, dwindling fish stocks, and the horror of unnecessary disease. For instance, AIDS should never have gotten out of control in Africa; it's unforgivable that the world community allowed it to get out of hand.

Oprah: If the Elders had existed 20 years ago, what difference do you think they might have made in the spread of AIDS in Africa?

Richard: They would have alerted the world to the issue, and if a particular president was denying that AIDS was related to HIV and that it was becoming a crisis, they would have had a quiet word with him or her. By moving quickly in situations like that, the Elders would be able to caution the world, and then get the resources to deal with a problem in its infancy.

Oprah: What happened the first time you gathered the Elders in one room? Were you nervous or intimidated?

Richard: Well, I'd already been spending a lot of time with Archbishop Desmond Tutu. He's one of the best human beings alive.

Oprah: There's no better spirit or vibe to be around.

Richard: And he has an absolutely wicked sense of humor!

Oprah: Yes! I think the fact that he's funny would surprise people.

Richard: I'm sure he's told you the one about getting to the kingdom of heaven to find two signs at the entrance: One reads for henpecked men only, and the second reads others. There's a massive queue of men lined up under the henpecked sign, and only one man beneath the others sign. God says to that one man, "You're lucky. How did you make it into this line?" "Well," the man says, "my wife told me to stand here!" And Tutu tells this joke while his wife is sitting right there next to him. Anyway, Peter and I had been working on this idea for five years before we convened the group, so we were exhilarated. Then Nelson Mandela arrived and made a very moving speech. [View this and the other Elders' speeches on theelders.org.] It was the birth of something special. And it's wonderful to have you on the sidelines.

Oprah: Last question. The Elders have the potential to do powerful work in the world. But what is your hope for ordinary citizens at home?

Richard: Peter Gabriel's desire is to use the Internet to connect leaders and citizens everywhere. In particular, we'd like to use retired people as a resource. There are so many incredible people who have knowledge that is often wasted in their later years; why shouldn't a doctor continue using his or her expertise? We want to create local groups of respected elders who can play a part in their communities. I think every person can make a difference. You don't have to be one of the Elders. You don't have to be well known. You just have to be determined to care about people. That's all it takes.