A dual chamber pacemaker system and method is provided for adjusting AV delay to provide for an optimal AV setting for a selected pacing application. In the inventive system and method, the basis for determining the AV delay setting is to perform a ventricular fusion test, wherein variations in QT interval are monitored corresponding to variations in AV interval. Based upon the AV-QT data, the pacemaker can determine the ventricular fusion zone where the pacemaker AV interval is substantially the same as the intrinsic conduction interval, as well as the knee where AV intervals just shorter than the ventricular fusion zone result in full capture. The pacemaker selects a routine for adjusting AV interval depending upon a desired application, including the applications of adjusting AV interval for full capture and for treatment of a HOCM patient. There is also provided a routine for determining an appropriate AV hysteresis value for inhibiting ventricular pacing and allowing ventricular sensing as much as possible, for patients with intermittent AV block.