Neuronal Munc18-1 and members of the Sec1/Munc18 (SM) protein family play a critical function(s) in intracellular membrane fusion together with SNARE proteins, but the mechanism of action of SM proteins remains highly enigmatic. During experiments designed to address this question employing a 7-nitrobenz-2-oxa-1,3-diazole (NBD) fluorescence de-quenching assay that is widely used to study lipid mixing between reconstituted proteoliposomes, we observed that Munc18-1 from squid (sMunc18-1) was able to increase the apparent NBD fluorescence emission intensity even in the absence of SNARE proteins. Fluorescence emission scans and dynamic light scattering experiments show that this phenomenon arises at least in part from increased light scattering due to sMunc18-1-induced liposome clustering. Nuclear magnetic resonance and circular dichroism data suggest that, although native sMunc18-1 does not bind significantly to lipids, sMunc18-1 denaturation at 37 °C leads to insertion into membranes. The liposome clustering activity of sMunc18-1 can thus be attributed to its ability to bridge two membranes upon (perhaps partial) denaturation; correspondingly, this activity is hindered by addition of glycerol. Cryo-electron microscopy shows that liposome clusters induced by sMunc18-1 include extended interfaces where the bilayers of two liposomes come into very close proximity, and clear hemifusion diaphragms. Although the physiological relevance of our results is uncertain, they emphasize the necessity of complementing fluorescence de-quenching assays with alternative experiments in studies of membrane fusion, as well as the importance of considering the potential effects of protein denaturation. In addition, our data suggest a novel mechanism of membrane hemifusion induced by amphipathic macromolecules that does not involve formation of a stalk intermediate.