Cell-to-cell fusion is crucial for the development and propagation of most eukaryotic organisms. Despite this importance, the molecular mechanisms mediating this process are only poorly understood in biological systems. In particular, the step of plasma membrane merger and the contributing proteins and physicochemical factors remain mostly unknown. Earlier studies provided the first evidence of a role of membrane sterols in cell-to-cell fusion. By characterizing different ergosterol biosynthesis mutants of the fungus Neurospora crassa, which accumulate different ergosterol precursors, we show that the structure of the sterol ring system specifically affects plasma membrane merger during the fusion of vegetative spore germlings. Genetic analyses pinpoint this defect to an event prior to engagement of the fusion machinery. Strikingly, this effect is not observed during sexual fusion, suggesting that the specific sterol precursors do not generally block membrane merger, but rather impair subcellular processes exclusively mediating fusion of vegetative cells. At a colony-wide level, the altered structure of the sterol ring system affects a subset of differentiation processes, including vegetative sporulation and steps before and after fertilization during sexual propagation. Together, these observations corroborate the notion that the accumulation of particular sterol precursors has very specific effects on defined cellular processes rather than nonspecifically disturbing membrane functioning. Given the phenotypic similarities of the ergosterol biosynthesis mutants of N. crassa during vegetative fusion and of Saccharomyces cerevisiae cells undergoing mating, our data support the idea that yeast mating is evolutionarily and mechanistically more closely related to vegetative than sexual fusion of filamentous fungi. Copyright © 2020 by the Genetics Society of America.