The lysozyme-induced fusion of phosphatidylserine/phosphatidylethanolamine vesicles as studied at a wide range of pH is found to correlate well with the binding of this protein to the vesicles. An identical 6000 molecular weight segment of lysozyme at the N-terminal region is found to be protected from tryptic digestion when initially incubated with vesicles at several pH values. Only this segment is labeled by dansyl chloride, which is partitioned into the bilayer. These results suggest the penetration of one segment of lysozyme into the bilayer. Photoactivated labeling of the membrane-penetrating segment of lysozyme with 3-(trifluoromethyl)-3-([125I]iodophenyl)diazirine ([125I]TID) and subsequent identification of the labeled residues by Edman degradation and gamma-ray counting indicate that four amino acids from the N-terminal are located outside the hydrophobic core of the bilayer. Although treatment of the membrane-embedded segment with aminopeptidase failed to cleave any amino acids from the N-terminal, it appears that a loop of lysozyme segment near the N-terminal penetrates into the bilayer at acidic pH. A helical wheel diagram shows that the labeling is done mainly on one surface of the alpha-helix. The penetration kinetics as studied by time-dependent [125I]TID labeling coincide with the fusion kinetics, strongly suggesting that the penetration of the lysozyme segment into the vesicles is the cause of the fusion.