Mutations in both alleles of the tumour suppressor gene coding for merlin/schwannomin, an ERM family protein, cause the hereditary disease neurofibromatosis type 2 (NF2). NF2 is characterized by the development of multiple nervous system tumours especially vestibular schwannomas. Efficient oncoretrovirus-mediated gene transfer of different merlin constructs was used to stably re-express wild-type merlin in primary cells derived from human schwannomas. Using two-parameter FACS analysis we show that expression of wild-type merlin in NF2 cells led to significant reduction of proliferation and G0/G1 arrest in transduced schwannoma cells. In addition, we show increased apoptosis of schwannoma cells transduced with wild-type merlin. Our findings in primary schwannoma cells from NF2 patients strongly support the hypothesis of merlin acting as a tumour suppressor and may help in understanding development of human schwannomas in NF2.