Processes such as endo- or exocytosis, membrane recycling, fertilization and enveloped viruses infection require one or more critical membrane fusion reactions. A key feature in viral and cellular fusion phenomena is the involvement of specific fusion proteins. Among the few well-characterized fusion proteins are viral spike glycoproteins responsible for penetration of enveloped viruses into their host cells, and sperm proteins involved in sperm-egg fusion. In their sequences, these proteins possess a "fusion peptide, " a short segment (up to 20 amino acids) of relatively hydrophobic residues, commonly found in a membrane-anchored polypeptide chain. To simulate protein-mediated fusion, many studies on peptide-induced membrane fusion have been conducted on model membranes such as liposomes and have employed synthetic peptides corresponding to the putative fusion sequences of viral proteins, or de novo synthesized peptides. Here, the application of peptides as a model system to understand the molecular details of membrane fusion will be discussed in detail. Data obtained from these studies will be correlated to biological studies, in particular those that involve viral and sperm-egg systems. Structure-function relationships will be revealed, particularly in the context of protein-induced membrane perturbations and bilayer-to-nonbilayer transition underlying the mechanism of fusion. We will also focus on the involvement of lipid composition of membranes as a potential regulating factor of the topological fusion site in biological systems.