High concentrations (> or = 20 wt %) of poly(ethylene glycol) (PEG) induce large, unilamellar, dipalmitoylphosphatidylcholine model membrane vesicles to fuse when the bilayers contain small amounts of amphipathic peturbant molecules. In addition to fusion, similar concentrations of PEG induce these vesicles to leak their contents. In this paper, we have asked if fusion could occur independently of leakage or if fusion might be described as local bilayer rupture followed by resealing. By following the release of MW 10,000 fluoresceinated dextran trapped inside vesicles, it was determined that PEG-induced leakage was the result of major membrane disruption and not small-pore formation. Fusion of vesicles containing 0.5 mol % palmitic acid was clearly observed at 20 wt % PEG, while 25 wt % was needed to cause rupture. On the other hand, vesicles containing 0.5 mol % lysophosphatidylcholine ruptured at roughly the same concentration needed to induce rupture. Two methods were developed for removing PEG so that fusion products could be characterized. Quasi-elastic light scattering demonstrated that fusing vesicles grew in size and that nonfusing vesicles did not. Moreover, PEG concentrations that induced rupture led to the appearance of species with mean diameters much larger than those of fused vesicles. High-resolution nuclear magnetic resonance showed that the population of large vesicles that correlated with rupture was composed of multilamellar vesicles while the population resulting from fusion alone remained unilamellar. We conclude that, upon incubation with and subsequent removal of PEG, vesicles were either unaffected, or fused to form larger, unilamellar vesicles, or ruptured to form larger, nonunilamellar species.