Mitofusin-2 (Mfn2) is an essential component of mitochondrial fusion machinery, but its molecular mechanism of action is not clear. We found that a Mfn2 deletion mutant lacking two transmembrane spans (MfnΔTM) acts as a dominant-negative mutant and blocks mitochondrial fusion. Furthermore, detailed analysis of various mutants of MfnΔTM revealed that GTPase activity and four regions highly conserved from nematodes to mammals are necessary for the dominant-negative effect. Immunoprecipitation studies of the N- and C-terminal cytosolic tails of Mfn2 showed that in addition to the coiled-coil domains previously identified, a highly conserved domain in the most N-terminal region and GTPase activity are necessary for the interaction between the N- and C-terminal tails, which is in turn required for the dominant-negative effect. In addition, we found unexpectedly that overexpression of the deletion mutant composed of one short region each in the N- and C-terminal tails of Mfn2 resulted in loss of mitochondrial membrane potential, suggesting that Mfn2 might also be connected to maintenance of mitochondrial membrane potential.