Cell fusion is ubiquitous among eukaryotes. Although little is known about the molecular mechanism, several proteins required for cell fusion in the yeast Saccharomyces cerevisiae have been identified. Fus2p, a key regulator of cell fusion, localizes to the shmoo tip in a highly regulated manner. C-terminal truncations of Fus2p cause mislocalization and fusion defects, which are suppressed by overexpression of Kel1p, a kelch-domain protein of unknown function previously implicated in cell fusion. We hypothesize that Fus2p mislocalization is caused by auto-inhibition, which is alleviated by Kel1p overexpression. Previous work showed that Fus2p localization is mediated by both Fus1p- and actin-dependent pathways. We show that the C-terminal mutations mainly affect the actin-dependent pathway. Suppression of the Fus2p localization defect by Kel1p is dependent upon Fus1p, showing that suppression does not bypass the normal pathway. Kel1p and a homolog, Kel2p, are required for efficient Fus2p localization, acting through the actin-dependent pathway. Although Kel1p overexpression can weakly suppress the mating defect of a FUS2 deletion, the magnitude of suppression is allele specific. Therefore, Kel1p augments, but does not bypass, Fus2p function. Fus2p mediates cell fusion by binding activated Cdc42p Although Kel1p overexpression suppresses a Cdc42p mutant that is defective for Fus2p binding, cell fusion remains dependent upon Fus2p These data suggest that Fus2p, Cdc42p, and Kel1p form a ternary complex, which is stabilized by Kel1p Supporting this hypothesis, Kel1p interacts with two domains of Fus2p, partially dependent on Cdc42p We conclude that Kel1p enhances the activity of Fus2p/Cdc42p in cell fusion.