Genetic alterations of neurofibromatosis type 2 (NF2) gene lead to the development of schwannomas, meningiomas, and ependymomas. Mutations of NF2 gene were also found in thyroid cancer, mesothelioma, and melanoma, suggesting that it functions as a tumor suppressor in a wide spectrum of cells. The product of NF2 gene is merlin (moesinezrin- radixin-like protein), a member of the Band 4.1 superfamily proteins. Merlin shares significant sequence homology with the ERM (Ezrin-Radixin-Moesin) family proteins and serves as a linker between transmembrane proteins and the actin- cytoskeleton. Merlin is a multifunctional protein and involved in integrating and regulating the extracellular cues and intracellular signaling pathways that control cell fate, shape, proliferation, survival, and motility. Recent studies showed that merlin regulates the cell-cell and cell-matrix adhesions and functions of the cell surface adhesion/extracellular matrix receptors including CD44 and that merlin and CD44 antagonize each others function and work upstream of the mammalian Hippo signaling pathway. Furthermore, merlin plays important roles in stabilizing the contact inhibition of proliferation and in regulating activities of several receptor tyrosine kinases. Accumulating data also suggested an emerging role of merlin as a negative regulator of growth and progression of several non-NF2 associated cancer types. Together, these recent advances have improved our basic understanding about merlin function, its regulation, and the major signaling pathways regulated by merlin and provided the foundation for future translation of these findings into the clinic for patients bearing the cancers in which merlin function and/or its downstream signaling pathways are impaired or altered.