Establishment and maintenance of proper architecture is essential for endoplasmic reticulum (ER) function. Homotypic membrane fusion is required for ER biogenesis and maintenance, and has been shown to depend on GTP hydrolysis. Here we demonstrate that Drosophila Atlastin—the fly homologue of the mammalian GTPase atlastin 1 involved in hereditary spastic paraplegia—localizes on ER membranes and that its loss causes ER fragmentation. Drosophila Atlastin embedded in distinct membranes has the ability to form trans-oligomeric complexes and its overexpression induces enlargement of ER profiles, consistent with excessive fusion of ER membranes. In vitro experiments confirm that Atlastin autonomously drives membrane fusion in a GTP-dependent fashion. In contrast, GTPase-deficient Atlastin is inactive, unable to form trans-oligomeric complexes owing to failure to self-associate, and incapable of promoting fusion in vitro. These results demonstrate that Atlastin mediates membrane tethering and fusion and strongly suggest that it is the GTPase activity that is required for ER homotypic fusion.