Various aspects of the interaction between the fusogen, poly(ethylene glycol) and phospholipids were examined. The aggregation and fusion of small unilamellar vesicles of egg phosphatidylcholine (PC), bovine brain phosphatidylserine (PS) and dimyristoylphosphatidylcholine (DMPC) were studied by dynamic light scattering, electron microscopy and NMR. The fusion efficiency of Dextran, glycerol, sucrose and poly(ethylene glycol) of different molecular weights were compared. Lower molecular weight poly(ethylene glycol) are less efficient with respect to both aggregation and fusion. The purity of poly(ethylene glycol) does not affect its fusion efficiency. Dehydrating agents, such as Dextran, glycerol and sucrose, do not induce fusion. 31P-NMR results revealed a restriction in the phospholipid motion by poly(ethylene glycol) greater than that by glycerol and Dextran of similar viscosity and dehydrating capacity. This may be associated with the binding of poly(ethylene glycol) to egg PC, with a binding capacity of 1 mol of poly(ethylene glycol) to 12 mol of lipid. Fusion is greatly enhanced below the phase transition for DMPC, with extensive fusion occurring below 6% poly(ethylene glycol). Fusion of PS small unilamellar vesicles depends critically on the presence of cations. Large unilamellar vesicles were found to fuse less readily than small unilamellar vesicles. The results suggest that defects in the bilayer plays an important role in membrane fusion, and the 'rigidization' of the phospholipid molecules facilitates fusion possibly through the creation of defects along domain boundaries. Vesicle aggregation caused by dehydration and surface charge neutralization is a necessary but not a sufficient condition for fusion.