We have recently employed fluorescence photobleaching recovery (FPR) to demonstrate that the envelope glycoproteins of Sendai virions become laterally mobile on the surface of human erythrocytes following fusion [Henis, Y. I., Gutman, O., & Loyter, A. (1985) Exp. Cell Res. 160, 514–526]. In order to investigate whether this lateral mobilization is involved in the mechanism of virally mediated cell-cell fusion, or is merely a result of viral envelope-cell fusion, we have now performed FPR studies on erythrocytes fused with reconstituted Sendai virus envelopes (RSVE). These RSVE, which were prepared by solubilization of Sendai virions with Triton X-100 followed by removal of the detergent through adsorption to SM-2 Bio-beads, fused with human erythrocytes as efficiently as native virions but induced cell-cell fusion to a much lower degree. The fraction of the viral envelope glycoproteins that became laterally mobile in the erythrocyte membrane following fusion was markedly lower in the case of RSVE than in the case of native virions. The lower cell-cell fusion activity of the RSVE does not appear to be due to inactivation of the viral fusion protein, since the envelope-cell fusion and hemolytic activities of the RSVE were similar to those of native virions. Moreover, fusion with RSVE or with native virions resulted in the incorporation of rather similar amounts of viral glycoproteins into the cell membrane. Since the reduced fraction of laterally mobile viral glycoproteins correlates with the lower cell-cell fusion activity of the RSVE, we propose that fusion of the viral envelopes with the cells is not sufficient for the induction of cell-cell fusion and that lateral motion of the viral envelope glycoproteins on the cell surface plays a role in the mechanism of virally mediated cell-cell fusion.