The limited pepsin proteolysis products of bovine serum albumin, fragment A (residues 307-586) and fragment B (residues 1-306), induced the fusion of small unilamellar vesicles of egg phosphatidyl choline at concentrations near 5 microM. Fusion was demonstrated and analyzed on the basis of: a) time-dependent changes in absorbance; b) dilution of the fluorescent label 2-(10-(1-pyrene)decanoyl) phosphatidyl choline, incorporated into a small percentage of the vesicles, as measured by the decrease in the excimer to monomer (E/M) ratio; c) increase of the average hydrodynamic radius of the liposomes, estimated by Sepharose 4B filtration, and d) the strict inverse relationship between the size of the liposomes and their E/M ratios. Albumin fragment B, like albumin, induced the formation of large aggregates in which rapid cooperative fusion produced vesicles having a large hydrodynamic radius. Fragment A did not produce large aggregates and the initial fusion products exhibited a hydrodynamic radius. Fragment A did not produce large aggregates and the initial fusion products exhibited a hydrodynamic radius smaller than those obtained with fragment B. Albumin and fragments A and B are fusogenic only at pH below 4.0. These data discussed in terms of a general model for a signal-dependent protein-induced membrane fusion.