Brunel University and Royal Holloway are to collaborate in research, teaching and some administration.
They have made joint research bids and are discussing working together on e-learning as well as projects in biological sciences, design and the performing arts.
The institutions said they were not planning a merger, but would not rule it out for the future. Martin Cave, vice-principal of Brunel, said: "If the collaboration goes well, over a period of time we might give thought to what the next steps are."
The institutions said no redundancies would arise from the proposals. "(Collaboration) will create more opportunities for research grants, enhance quality of teaching and increase activity rather than reduce it," Royal Holloway vice-principal John Turner said.
He added that Royal Holloway was also exploring collaborative opportunities with Surrey and Reading universities.
Brunel and Royal Holloway have already made two joint proposals for Science Research Investment Fund money. One is to establish a functional genomics centre, with the genomics facilities run by Brunel and the proteomics (the study of proteins) facility at Royal Holloway. The other bid would see the purchase of a regional facility for brain imaging research.
Professor Turner said other areas that might benefit from collaboration in research included design, performing arts, and environmental studies.
Possibilities also exist for collaborating in teaching, particularly in biological sciences. "Maintaining adequate curriculum coverage is difficult unless you are huge. We are exploring the possibility of each department specialising in its own thing and offering teaching across to the other."
Other possibilities include administrative tasks, for example jointly outsourcing specialist services in areas such as personnel or working together to produce human resources policies.