Recombinant transmembrane adenylate cyclase (AC) was incorporated into membranes of giant liposomes using membrane fusion between liposomes and baculovirus-budded virus (BV). AC genes were constructed into transfer vectors in a form fused with fluorescent protein or polyhistidine at the C-terminus. The recombinant BVs were collected by ultracentrifugation and AC expression was verified using western blotting. The BVs and giant liposomes generated using gentle hydration were fused under acidic conditions; the incorporation of AC into giant liposomes was demonstrated by confocal laser scanning microscopy through the emission of fluorescence from their membranes. The AC-expressing BVs were also fused with liposomes containing the substrate (ATP) with/without a specific inhibitor (SQ 22536). An enzyme immunoassay on extracts of the sample demonstrated that cAMP was produced inside the liposomes. This procedure facilitates direct introduction of large transmembrane proteins into artificial membranes without solubilization.