Exocytosis in yeast requires the assembly of the secretory vesicle soluble N-ethylmaleimide–sensitive factor attachment protein receptor (v-SNARE) Sncp and the plasma membrane t-SNAREs Ssop and Sec9p into a SNARE complex. High-level expression of mutant Snc1 or Sso2 proteins that have a COOH-terminal geranylgeranylation signal instead of a transmembrane domain inhibits exocytosis at a stage after vesicle docking. The mutant SNARE proteins are membrane associated, correctly targeted, assemble into SNARE complexes, and do not interfere with the incorporation of wild-type SNARE proteins into complexes. Mutant SNARE complexes recruit GFP-Sec1p to sites of exocytosis and can be disassembled by the Sec18p ATPase. Heterotrimeric SNARE complexes assembled from both wild-type and mutant SNAREs are present in heterogeneous higher-order complexes containing Sec1p that sediment at greater than 20S. Based on a structural analogy between geranylgeranylated SNAREs and the GPI-HA mutant influenza virus fusion protein, we propose that the mutant SNAREs are fusion proteins unable to catalyze fusion of the distal leaflets of the secretory vesicle and plasma membrane. In support of this model, the inverted cone–shaped lipid lysophosphatidylcholine rescues secretion from SNARE mutant cells.