Regulatory features of protein-induced membrane fusion are largely unclear, particularly at the level of the fusion peptide. Fusion peptides being part of larger protein complexes, such investigations are met with technical limitations. Here, we show that the fusion activity of influenza virus or Golgi membranes is strongly inhibited by minor amounts of (lyso)lipids when present in the target membrane but not when inserted into the viral or Golgi membrane itself. To investigate the underlying mechanism, we employ a membrane-anchored peptide system and show that fusion is similarly regulated by these lipids when inserted into the target but not when present in the peptide-containing membrane. Peptide-induced fusion is regulated by a reversible switch of secondary structure from a fusion-permissive ␣-helix to a nonfusogenic -sheet. The "on/off" activation of this switch is governed by minor amounts of (lyso)-phospholipids in targets, causing a drop in ␣-helix and a dramatic increase in -sheet contents. Concomitantly, fusion is inhibited, due to impaired peptide insertion into the target membrane. Our observations in biological fusion systems together with the model studies suggest that distinct lipids in target membranes provide a means for regulating membrane fusion by causing a reversible secondary structure switch of the fusion peptides.Membrane proteins located on the surfaces of viruses, sperm, and intracellular membranes are intimately involved in membrane fusion. The overall fusion machinery, including molecular factors for targeting, attachment, and regulation of these events, can be quite complex. For example, the SNARE (Soluble NSF Attachment protein REceptors) system, mediating intracellular fusion events, consists of specific membrane proteins, present on vesicle (v-SNARE) and target membrane (t-SNARE), and cytosolic ATPases, such as N-ethylmaleimide-