Biological membranes are made up of a variety of lipids with diverse physicochemical properties. The lipid composition modulates different lipidic parameters, such as hydration, dynamics, lipid packing, curvature strain, etc. Changes in these parameters affect various membrane-mediated processes, such as membrane fusion which is an integral step in many biological processes. Packing defects, which originate either from mismatch in the headgroup region or in the hydrophobic acyl tail region, play a major role in modulating membrane dynamics. In this study, we demonstrate how even a small mismatch in the fatty acyl chain length, achieved by incorporation of low concentrations (up to 30 mol %) of dipalmitoylphosphatidylcholine (DPPC) into dimyristoylphosphatidylcholine (DMPC) small unilamellar vesicles (SUVs), alters several lipidic parameters like packing, dynamics, and headgroup hydration. This in turn affects non steroidal anti-inflammatory drug (NSAID) induced membrane fusion. Dynamic light scattering, differential scanning calorimetry, second-derivative absorption spectrophotometry, and steady-state and time-resolved fluorescence have been used to elucidate the effect of small mismatch in the tails in DMPC/DPPC mixed vesicles and how it modulates membrane fusion induced by the oxicam NSAIDs, meloxicam (Mx), piroxicam (Px), and tenoxicam (Tx). Fusion kinetics was monitored using fluorescence based fusion assays. At low DPPC concentration of 10 mol %, additional fluidization promotes lipid mixing to some extent for Mx, but at higher mol % of DPPC, subsequent increase in rigidity of membrane interior along with increase in headgroup hydration, synergistically inhibits fusion to various extents for the three different drugs, Mx, Px, and Tx.