THE luminosity profile of elliptical galaxies for the most part follows a smooth distribution of the de Vaucouleurs form1, but recent observations have shown that most ellipticals possess fine structure, including sharp-edged 'shells'2–5 and 'ripples'6–8. This suggests that the underlying dynamical structure is not fully relaxed, and Schweizer's proposal6 that these features result from the accretion of matter from a less massive companion galaxy has been amply confirmed by simulations of galaxy encounters and mergers9–14. A likely supply of shell-forming material is dwarf spheroidal and disk galaxies, which tend to be gas-rich, but shell galaxies do not seem to have any notable excess of gas15,16. Here we report simulations of shell-forming galaxy mergers in which gas and stars are tracked separately. We find that the two components are effectively segregated: the stars form sharp-edged features by oscillating back and forth in their orbits, but most of the gas settles into a compact disk or ring in the nucleus of the primary. Shocks in the gas are likely to lead to star formation, perhaps accounting for the presence of young stars in the nuclei of some shell galaxies; if the primary galaxy contains a central black hole, evolution of the new supply of gas may yield an active galactic nucleus. Mergers between large galaxies and gas-rich satellites may therefore be a way of activating dormant elliptical galaxies.