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Flaviviruses infect their host cells by a membrane fusion reaction. In this study, we performed a functional analysis of the membrane fusion properties of West Nile virus (WNV) with liposomal target membranes. Membrane fusion was monitored continuously using a lipid mixing assay involving the fluorophore, pyrene. Fusion of WNV with liposomes occurred on the timescale of seconds and was strictly dependent on mildly acidic pH. Optimal fusion kinetics were observed at pH 6.3, the threshold for fusion being pH 6.9. Preincubation of the virus alone at pH 6.3 resulted in a rapid loss of fusion capacity. WNV fusion activity is strongly promoted by the presence of cholesterol in the target membrane. Furthermore, we provide direct evidence that cleavage of prM to M is a requirement for fusion activity of WNV.