Urinary bladder instillation of ovalbumin into presensitized guinea pigs stimulates rapid development of local bladder inflammation. Substance P is an important mediator of this inflammatory response, as substance P antagonists largely reverse the process. Vacuolization of the subapical endosomal compartment of the transitional epithelial cells lining the bladder suggests that changes in endosomal trafficking and fusion are also part of the inflammatory response. To test directly for substance P mediation of changes in endosomal fusion, we reconstituted fusion of transitional cell endosomes in vitro using both cuvette-based and flow cytometry energy transfer assays. Bladders were loaded with fluorescent dyes by a hypotonic withdrawal protocol before endosomal isolation by gradient centrifugation. Endosomal fusion assayed by energy transfer during in vitro reconstitution was both cytosol and ATP dependent. Fusion was confirmed by the increase in vesicle size on electron micrographs of fused endosomal preparations compared with controls. In inflamed bladders, dye uptake was inhibited 20% and endosomal fusion was inhibited 50%. These changes are partly mediated by the neurokinin-1 (NK1) receptor (NK1R), as 4 mg/kg of CP-96,345, a highly selective NK1 antagonist, increased fusion in inflamed bladders but had no effect on control bladders. The receptor-mediated nature of this effect was demonstrated by the expression of substance P receptor mRNA in rat bladder lumen scrapings and by the detection of the NK1R message in guinea pig subapical endosomes by Western blot analysis. The NK1Rs were significantly upregulated following induction of an inflammatory response in the bladder. These results demonstrate that 1) in ovalbumin-induced inflammation in the guinea pig bladder, in vitro fusion of apical endosomes is inhibited, showing endocytotic processes are altered in inflammation; 2) pretreatment in vivo with an NK1R antagonist blocks this inhibition of in vitro fusion, demonstrating a role for NK1R in this process; and 3) the NK1R is present in higher amounts in apical endosomes of inflamed bladder, suggesting changes in translation or trafficking of the NK1R during the inflammatory process. This suggests that NK1R can change the fusion properties of membranes in which it resides.