The neurofibromatosis type 2 (NF2) gene encodes an intracellular membrane-associated protein called merlin or schwannomin, which is known to be a tumor suppressor. Numerous studies have suggested that merlin is involved in the regulation of cell growth and proliferation. Previously, merlin/schwannomin was reported to block Ras-induced cell proliferation and anchorage-independent cell growth. Also, the N-terminus of merlin was found to Suppress cell proliferation, although it appears to be less effective than full-length merlin. However, the inhibitory mechanism of merlin is unknown. In this report, merlin is shown to be effective at suppressing serum/Ras-induced and Elk-mediated SRE dependent transactivation, and serum-induced ERK phosphorylation in NIH3T3 cells. In addition, merlin inhibited serum-induced Elk phosphorylation. a downstream effector of ERKs. Also, the N-terminal deficient merlin mutant could not block serum-induced and Elk-mediated SRE dependent transactivation, although the C-terminal deficient merlin mutant could. These results suggest that merlin inhibits SRE dependent transactivation by repressing serum-induced ERK phosphorylation and its downstream effector, Elk phosphorylation. Also, the N-terminus of merlin may be important for its inhibitory effect. Our results show that merlin acts as a negative regulator of the SRE signaling pathway via the Ras-ERKs pathway. (C) 2003 Elsevier Science (USA). All rights reserved.