The capacity of the snake venom neurotoxin β-bungarotoxin to induce fusion of small unilamellar liposomes was demonstrated. The fusion process was studied spectroscopically using three different methods: (i) by resonance energy transfer, using fluorescent lipid analogues; (ii) by the Tb/DPA assay; (iii) by electron spin resonance, using spin-labeled phospholipids. For the latter technique, a new method of analysis based on Fourier-transform component separation was developed. The fusogenic activity was found to be strongly correlated with the known phospholipase A2 activity of the toxin: both functions were shown to have a specific requirement of Ca2+ at almost stoichiometrical concentrations, much below the threshold values found for unspecific divalent cation induced vesicle fusion. Similarly, the presence of phosphatidic acid in the target membrane was essential for both fusogenic and enzymatic activities. The results suggest a molecular mechanism of fusion involving protein binding to negatively charged groups on the membrane surface, followed by local formation of lysophospholipids and as a consequence hereof the creation of point defects in the lipid structure. On the basis of these findings, a model is put forward to explain the specific mode of action of β-bugarotoxin in vivo. © 1990, American Chemical Society. All rights reserved.