The neurofibromatosis type 2 (NF2) gene encodes an ezrin-radixin-moesin (ERM) related protein, referred to as either merlin or schwannomin, that is known to be a tumor suppressor. NF-kappaB signaling is known to be important for controlling cellular proliferation and protecting against apoptosis. In this report, merlin was demonstrated to be effective in suppressing the NF-kappaB signaling pathway in NIH3T3 and C6 cells. In addition, merlin blocked the tumor necrosis factor-alpha (TNF-alpha)-induced NF-kappaB-DNA binding mediated via the inhibition of degradation of IkappaBalpha and blocked the activation of NF-kappaB-dependent transcription. A reporter gene assay using deletion mutants of NF2 showed that the N-terminus (amino acids 1-130) of merlin may be important for its inhibition of NF-kappaB activation. These results show that merlin acts as a negative regulator of the NF-kappaB signaling pathway.