Homotypic membrane fusion of the endoplasmic reticulum (ER) is mediated by dynamin-like GTPase atlastin (ATL). This fundamental process relies on GTP-dependent domain rearrangements in the N-terminal region of ATL (ATLcyto), including the GTPase domain and three-helix bundle (3HB). However, its conformational dynamics during the GTPase cycle remain elusive. Here, we combine single-molecule FRET imaging and molecular dynamics simulations to address this conundrum. Different from the prevailing model, ATLcyto can form a loose crossover dimer upon GTP binding, which is tightened by GTP hydrolysis for membrane fusion. Furthermore, the α-helical motif between the 3HB and transmembrane domain, which is embedded in the surface of the lipid bilayer and self-associates in the crossover dimer, is required for ATL function. To recycle the proteins, Pi release, which disassembles the dimer, activates frequent relative movements between the GTPase domain and 3HB, and subsequent GDP dissociation alters the conformational preference of the ATLcyto monomer for entering the next reaction cycle. Finally, we found that two disease-causing mutations affect human ATL1 activity by destabilizing GTP binding-induced loose crossover dimer formation and the membrane-embedded helix, respectively. These results provide insights into ATL-mediated homotypic membrane fusion and the pathological mechanisms of related disease.