A simple and real-time cell-based assay of membrane fusion employing a pair of engineered novel reporter proteins is described. The reporter proteins are chimeras of split Renilla luciferase (RL) and split green fluorescent protein (GFP). This reporter allows us to perform both quantitative (RL mode) and visible (GFP mode) membrane fusion assays in live cells. The kinetic assay enabled by this method helps understand the mechanism of membrane fusion mediated by a viral envelope protein. This assay system is also suitable for the screening of potential inhibitors. The timing of inhibition by a particular inhibitor can be analyzed by time-dependent addition of the inhibitor. Although this unit demonstrates the application of the method for the analysis of HIV-1 envelope protein, the reporter can be applied to analyses of various other viral envelope proteins.