The interaction of cationic liposomes prepared using either dioleoyltrimethylammonium propane (DOTAP) or 3 beta-(N-(N',N'-dimethylaminoethane)carbamoyl)cholesterol (DC-CHOL) with model membranes and with cultured mammalian cells was examined using an assay developed for monitoring virus-cell fusion (Stegmann et al. (1993) Biochemistry 32, 11330-11337). Lipid mixing between cationic liposomes and liposomes composed of DOPE/dioleoylphosphatidylglycerol (DOPG) or dioleoylphosphatidylcholine (DOPC)/DOPG was insensitive to pH in the range of pH 4.5-7.0 and was not affected by sodium chloride concentration in the range of 0-150 mM. Lipid mixing was dependent on dioleoylphosphatidylethanolamine (DOPE), since cationic liposomes prepared using dioleoylphosphatidylcholine (DOPC) were incapable of lipid mixing with DOPC/DOPG liposomes. The interaction of cationic liposomes with Hep G-2 and CHO D- cells was also studied. For both cell types, liposome-cell lipid mixing was rapid at 37 degrees C, beginning within minutes and continuing for up to 1 hour after uptake. The extent of lipid mixing was decreased at 15 degrees C, especially at later (> or = 20 min) time points. This suggests that at least part of the observed lipid mixing occurred after reaching cellular lysosomes. No lipid mixing was seen at 4 degrees C. Monensin inhibited lipid mixing between cationic liposomes and the cells, despite having no effect on liposome uptake. Inhibition of endocytic uptake of liposomes, either by incubation in hypertonic media or by depletion of cellular ATP with sodium azide and 2-deoxyglucose abolished liposome-cell fusion in both cell types. These data demonstrate that binding to the cell surface is insufficient for cationic liposome-cell fusion and that uptake into the endocytic pathway is required for fusion to occur.