SV-201, a peptide derived from a conserved and potentially amphipathic region (amino acids 201-229) in the Sendai virus ectodomain, specifically inhibited virus-mediated hemolysis only when added to virions prior to their attachment to red blood cells. Sendai virus-mediated hemagglutinin assay in the presence of SV-201 demonstrated that the peptide does not disturb the binding of virions to the target red blood cells. A mutated peptide with 2 amino acids substitution, rendering the peptide neutral, was biologically inactive. A second mutant with 7 amino acids randomized at the N terminus keeping the hydrophobicity of the peptide unaltered was only slightly active. A hydrophobic peptide corresponding to the fusion peptide domain was also inactive. SV-201, the two mutants, and the fusion peptide bind similarly with high affinity to both negatively charged phosphatidylserine/phosphatidylcholine and zwitterionic phosphatidylcholine lipid vesicles, suggesting that the inhibitory effect is not due merely to membrane modulation. Fluorescence studies with rhodamine-labeled peptides and SV-201-induced inhibition assays, demonstrated that the SV-201 binding site is most probably located in the region corresponding to amino acids 201-229 of the Sendai virus fusion protein. The data presented here suggest that SV-201 disturbs a functional domain in the Sendai virus fusion protein, which is most probably associated with the assembly of the fusion protein and/or membrane apposition. The existence of homologous SV-201 regions in other viruses suggests that these regions may have a similar role, and their synthetic counterparts may act as inhibitors for the corresponding viruses.