Prm1p is a multipass membrane protein that promotes plasma membrane fusion during yeast mating. The mechanism by which Prm1p and other putative regulators of developmentally controlled cell-cell fusion events facilitate membrane fusion has remained largely elusive. Here, we report that Prm1p forms covalently linked homodimers. Covalent Prm1p dimer formation occurs via intermolecular disulfide bonds of two cysteines, Cys-120 and Cys-545. PRM1 mutants in which these cysteines have been substituted are fusion defective. These PRM1 mutants are normally expressed, retain homotypic interaction and can traffic to the fusion zone. Because prm1-C120S and prm1-C545S mutants can form covalent dimers when coexpressed with wild-type PRM1, an intermolecular C120-C545 disulfide linkage is inferred. Cys-120 is adjacent to a highly conserved hydrophobic domain. Mutation of a charged residue within this hydrophobic domain abrogates formation of covalent dimers, trafficking to the fusion zone, and fusion-promoting activity. The importance of intermolecular disulfide bonding informs models regarding the mechanism of Prm1-mediated cell-cell fusion.