The Nf2 tumor suppressor gene product merlin is related to the membrane-cytoskeleton linker proteins of the band 4.1 superfamily, including ezrin, radixin, and moesin (ERMs). Merlin is regulated by phosphorylation in a Rac/cdc42-dependent fashion. We report that the phosphorylation of merlin at serine 518 is induced by the p21-activated kinase PAK2. This is demonstrated by biochemical fractionation, use of active and dominant-negative mutants of PAK2, and immunodepletion. By using wild-type and mutated forms of merlin and phospho-directed antibodies, we show that phosphorylation of merlin at serine 518 leads to dramatic protein relocalization.