Membrane fusion is a highly evolved and significant physiological process involving the mixing of two initially distinct lipid bilayer membranes. It is concerned with communication between and within cells and plays a key role in various processes such as exocytosis, endocytosis, fertilization, viral infection, and carcinogenesis. Due to its significant role, artificial model systems using lipid membranes have been developed over the last few decades which study the membrane fusion mechanism on a molecular level. More recently, this field of research has shifted its attention towards the use of these developed models for a diverse range of biomolecular and biomedical applications. This review will focus on current applications which stem from these models including drug delivery, sensing, protocell proliferation, and others. Our opinions on the future advancements of this field will also be included.