Fusion of intracellular membrane-bound compartments is a common step in the transport of macromolecules along the endocytic and secretory pathways. Previous work has shown that GTP gamma S stimulates endosome fusion in the presence of low concentrations of cytosol. In this study, we have characterized the effect of rab5:Q79L, a mutant with reduced GTPase activity, on endosome fusion in a cell-free assay. rab5:Q79L stimulates in vitro endosome fusion. The stimulatory effects required ATP, were blocked by N-ethylmaleimide (NEM) and anti-NEM-sensitive fusion (NSF) protein antibody, but could proceed in the absence of cytosol. Stimulation of fusion with rab5:Q79L led to rapid inactivation of the vesicles when tested in a second incubation for fusogenic activity. By electron microscopy, endosomes connected by tubular structures were frequently observed in the presence of rab5:Q79L. Rab5:Q79L promoted fusion only among early endosomes; when the ligands were chased into more mature endocytic compartments, fusion was not observed. Phospholipase A2 inhibitors blocked rab5:Q79L-stimulated fusion. The results indicate that rab5:Q79L promotes fusion by activating factors already present in the membranes and that NSF and phospholipase A2 activities are required downstream of rab5.