The neurofibromatosis 2 (NF2) gene product, merlin, is a tumor suppressor protein mutated in schwanno-mas and several other tumors. Merlin, which shares significant homology with the actin-associated proteins ezrin, radixin and moesin (ERM proteins), inhibits cell growth when overexpressed in cell lines. The similarities between merlin and ERM proteins suggest that merlin's growth-regulatory capabilities may be due to alterations in cytoskeletal function. We examined this possibility in rat schwannoma cell lines overexpressing wild-type merlin isoforms and mutant merlin proteins. We found that overexpression of wild-type merlin resulted in transient alterations in F-actin organization, cell spreading and cell attachment. Merlin overexpression also impaired cell motility as measured in an in vitro motility assay. These effects were only observed in cells overexpressing a merlin isoform capable of inhibiting cell growth and not with mutant merlin molecules (NF2 patient mutations) or a merlin splice variant (isoform II) lacking growth-inhibitory activity. These data indicate that merlin may function to maintain normal cytoskeletal organization, and suggest that merlin's influence on cell growth depends on specific cytoskeletal rearrangements.