Biological cells continue to inspire the development of technologies toward rapid, sensitive, and selective detection of analytes. Membrane fusion is a key biological event in living cells that involves a highly selective recognition mechanism controlled by different functional proteins. Herein, liposome–liposome fusion mediated by coiled‐coil forming peptides JR2EC and JR2KC to mimic biological membrane fusion is reported. The liposome fusion event is monitored through fluorescence generation and this mechanism forms the basis of a detection assay for matrix metalloproteinases (MMPs), which are key homeostatic proteases. Using this approach, a limit of detection of 0.35 µg mL−1 MMP‐7 in biological samples is obtained, and this assay does not require washing, separation, or amplification steps. The developed tool could be extended for the detection of other proteolytic enzymes of the MMP family (diagnostic or prognostic markers) and has the potential for screening of peptide libraries against a target of interest.