Merlin, a neurofibromatosis type-2 tumor suppressor, shows significant sequence similarity to ERM (Ezrin/Radixin/Moesin) proteins, general actin filament/plasma membrane cross-linkers, which are regulated in a Rho-dependent manner. To understand its physiological functions, we compared merlin with ERM proteins in vivo and in vitro. Quantitative immunoblotting revealed that the molar ratio of merlin/ERM in cultured epithelial or non-epithelial cells was approximately 0.14 or approximately 0.05, respectively. After centrifugation of cell homogenate, merlin was mostly recovered in the insoluble fraction, whereas almost half of ERM proteins were found in the soluble fraction. Merlin and ERM proteins were concentrated at microvilli when introduced into fibroblasts. In contrast, in epithelial cells, introduced merlin was co-distributed with E-cadherin in lateral membranes, whereas ERM proteins were concentrated in apical microvilli. Finally, we examined the binding affinity of merlin to Rho GDP dissociation inhibitor (Rho-GDI), to which N-terminal halves of ERM proteins but not the full-length molecules specifically bind. In vitro binding assays revealed that the N-terminal halves of merlin isoform-I and -II as well as full-length merlin isoform-II bound to Rho-GDI with similar binding affinity to ERM proteins. Immunoprecipitation confirmed these findings in vivo. These findings do not favor the notion that merlin functions simply in a redundant or competitive manner to ERM proteins.