Cell-cell fusion is essential for a variety of developmental steps in many eukaryotic organisms, during both fertilization and vegetative cell growth. Although the molecular mechanisms associated with intracellular membrane fusion are well characterized, the molecular mechanisms of plasma membrane merger between cells are poorly understood. In the filamentous fungus Neurospora crassa, cell fusion events occur during both vegetative and sexual stages of its life cycle, thus making it an attractive model for studying the molecular basis of cell fusion during vegetative growth vs. sexual reproduction. In the unicellular yeast Saccharomyces cerevisiae, one of the few proteins implicated in plasma membrane merger during mating is Prm1p; prm1Delta mutants show an approximately 50% reduction in mating cell fusion. Here we report on the role of the PRM1 homolog in N. crassa. N. crassa strains with deletions of a Prm1-like gene (Prm1) showed an approximately 50% reduction in both vegetative and sexual cell fusion events, suggesting that PRM1 is part of the general cell fusion machinery. However, unlike S. cerevisiae, N. crassa strains carrying a Prm1 deletion exhibited complete sterility as either a male or female mating partner, a phenotype that was not complemented in a heterokaryon with wild type (WT). Crosses with DeltaPrm1 strains were blocked early in sexual development, well before development of ascogenous hyphae. The DeltaPrm1 sexual defect in N. crassa was not suppressed by mutations in Sad-1, which is required for meiotic silencing of unpaired DNA (MSUD). However, mutations in Sad-1 increased the number of progeny obtained in crosses with a DeltaPrm1 (Prm1-gfp) complemented strain. These data indicate multiple roles for PRM1 during sexual development.