The p15 fusion-associated small transmembrane (FAST) protein is a nonstructural viral protein that induces cell-cell fusion and syncytium formation. The exceptionally small, myristoylated N-terminal ectodomain of p15 lacks any of the defining features of a typical viral fusion protein. NMR and CD spectroscopy indicate this small fusion module comprises a left-handed polyproline type II (PPII) helix flanked by small, unstructured N and C termini. Individual prolines in the 6-residue proline-rich motif are highly tolerant of alanine substitutions, but multiple substitutions that disrupt the PPII helix eliminate cell-cell fusion activity. A synthetic p15 ectodomain peptide induces lipid mixing between liposomes, but with unusual kinetics that involve a long lag phase before the onset of rapid lipid mixing, and the length of the lag phase correlates with the kinetics of peptide-induced liposome aggregation. Lipid mixing, liposome aggregation, and stable peptide-membrane interactions are all dependent on both the N-terminal myristate and the presence of the PPII helix. We present a model for the mechanism of action of this novel viral fusion peptide, whereby the N-terminal myristate mediates initial, reversible peptide-membrane binding that is stabilized by subsequent amino acid-membrane interactions. These interactions induce a biphasic membrane fusion reaction, with peptide-induced liposome aggregation representing a distinct, rate-limiting event that precedes membrane merger. Although the prolines in the proline-rich motif do not directly interact with membranes, the PPII helix may function to force solvent exposure of hydrophobic amino acid side chains in the regions flanking the helix to promote membrane binding, apposition, and fusion.