Fusion of multilamellar phospholipid vesicles with planar phospholipid bilayer membranes was monitored by the rate of appearance in the planar membrane of an intrinsic membrane protein present in the vesicle membranes. An essential requirement for fusion is an osmotic gradient across the planar membrane, with the cis side (the side containing the vesicles) hyperosmotic to the opposite (trans) side; for substantial fusion rates, divalent cation must also be present on the cis side. Thus, the low fusion rates obtained with 100 mM excess glucose in the cis compartment are enhanced orders of magnitude by the addition of 5-10 mM CaCl2 to the cis compartment. Conversely, the rapid fusion rates induced by 40 mM CaCl2 in the cis compartment are completely suppressed when the osmotic gradient (created by the 40 mM CaCl2) is abolished by addition of an equivalent amount of either CaCl2, NaCl, urea, or glucose to the trans compartment. We propose that fusion occurs by the osmotic swelling of vesicles in contact with the planar membrane, with subsequent rupture of the vesicular and planar membranes in the region of contact. Divalent cations catalyze this process by increasing the frequency and duration of vesicle-planar membrane contact. We argue that essentially this same osmotic mechanism drives biological fusion processes, such as exocytosis. Our fusion procedure provides a general method for incorporating and reconstituting transport proteins into planar phospholipid bilayer membranes.