The structural complexity of the cell membrane makes analysis of membrane processes in living cells, as compared to model membrane systems, highly challenging. Living cells decorated with surface-attached colorimetric/fluorescent polydiacetylene patches might constitute an effective platform for analysis and visualization of membrane processes in situ. This work examines the biological and chemical consequences of plasma membrane labeling of promyelocytic leukemia cells with polydiacetylene. We show that the extent of fusion between incubated lipid/diacetylene vesicles and the plasma membrane is closely dependent upon the lipid composition of both vesicles and cell membrane. In particular, we find that cholesterol presence increased bilayer fusion between the chromatic vesicles and the plasma membrane, suggesting that membrane organization plays a significant role in the fusion process. Spectroscopic data and physiological assays show that decorating the cell membrane with the lipid/diacetylene patches reduces the overall lateral diffusion within the membrane bilayer, however polydiacetylene labeling does not adversely affect important cellular metabolic pathways. Overall, the experimental data indicate that the viability and physiological integrity of the surface-engineered cells are retained, making possible utilization of the platform for studying membrane processes in living cells. We demonstrate the use of the polydiacetylene-labeled cells for visualizing and discriminating among different membrane interaction mechanisms of pharmaceutical compounds.