Synaptotagmin (syt) 1 is localized to synaptic vesicles, binds Ca2+, and regulates neuronal exocytosis. Syt 1 harbors two Ca2+-binding motifs referred to as C2A and C2B. In this study we examine the function of the isolated C2 domains of Syt 1 using a reconstituted, SNARE (soluble N-ethylmaleimide-sensitive factor attachment receptor)-mediated, fusion assay. We report that inclusion of phosphatidylethanolamine into reconstituted SNARE vesicles enabled isolated C2B, but not C2A, to regulate Ca2+-triggered fusion. The isolated C2B domain had a 6-fold lower EC50 for Ca2+-activated fusion than the intact cytosolic domain of Syt 1 (C2AB). Phosphatidylethanolamine increased both the rate and efficiency of C2AB- and C2B-regulated fusion without affecting their abilities to bind membrane-embedded syntaxin-SNAP-25 (t-SNARE) complexes. At equimolar concentrations, the isolated C2A domain was an effective inhibitor of C2B-, but not C2AB-regulated fusion; hence, C2A has markedly different effects in the fusion assay depending on whether it is tethered to C2B. Finally, scanning alanine mutagenesis of C2AB revealed four distinct groups of mutations within the C2B domain that play roles in the regulation of SNARE-mediated fusion. Surprisingly, substitution of Arg-398 with alanine, which lies on the opposite end of C2B from the Ca2+/membrane-binding loops, decreases C2AB t-SNARE binding and Ca2+-triggered fusion in vitro without affecting Ca2+-triggered interactions with phosphatidylserine or vesicle aggregation. In addition, some mutations uncouple the clamping and stimulatory functions of syt 1, suggesting that these two activities are mediated by distinct structural determinants in C2B.