A theoretical model for vesicle fission induced by particle adsorption and aggregation on a membrane surface is presented. The bulk fluid contains particles that are adsorbed reversibly to the membrane. Adsorbed particles aggregate on the membrane, forming particle-rich domains. Domains at a critical size which contains nv particles become vesicles and leave the membrane. We find that for parameters that correspond to typical experimental situations, vesicle formation is energetically favored except for a possible energy barrier for domain nucleation at small n, where n is the number of particles in a domain. We also find that in typical experimental situations a particle-rich domain grows without being affected strongly by neighboring domains, and the vesicle formation rate is proportional to adsorption rate jon when jon is large; when jon is small the vesicle formation rate scales like jon2. Because the diffusion flux is small for domains with small in-plane radius Rn, in the time-independent state the densities of domains with n/nv«1 and 1-n/nv«1 are large.