Neurofibromatosis type 2, a disease characterized by the formation of multiple nervous system tumors, especially schwannomas, is caused by mutation in the gene-encoding merlin/schwannomin. The molecular mechanism by which merlin functions as a tumor suppressor is unknown, but is hypothesized to involve plasma membrane and cytoskeleton interaction. Several merlin antibodies were used to study merlin expression, localization, and protein association in primary cultures of rat sensory neurons, Schwann cells (SCs), and SCs grown with neurons (SC/N cultures) before and during differentiation into myelinating cells. Western blot analysis revealed that neurons predominantly expressed a 68-kD protein, but SCs expressed two additional 88- and 120-kD related proteins. Extensive immunological characterization demonstrated that the 88-kD protein shared three domains with the 68-kD merlin protein. Western blot analysis of soluble and insoluble culture fractions demonstrated that the majority of merlin and related proteins were soluble in isolated SCs and undifferentiated SC/N cultures, but became insoluble in myelinating SC/N cultures. Double immunofluorescence staining suggested that merlin translocated from the perinuclear cytoplasm in undifferentiated SCs to the subplasmalemma in differentiating SCs and partially colocalized with beta1 integrin. Finally, beta1 integrin antibody coimmunoprecipitated 68-kD merlin from isolated SC and undifferentiated SC/N cultures, but predominantly the 88-kD protein from differentiating SC/N cultures. Together, these results provide evidence that merlin interacts with beta1 integrin and that merlin localization changes from a cytosolic to cytoskeletal compartment during SC differentiation.