Inhibition of proliferation by cell-to-cell contact is essential for tissue organization, and its disruption contributes to tumorigenesis. The FERM domain protein Merlin, encoded by the NF2 tumour suppressor gene, is an important mediator of contact inhibition. Merlin was thought to inhibit mitogenic signalling and activate the Hippo pathway by interacting with diverse target-effectors at or near the plasma membrane. However, recent studies highlight that Merlin pleiotropically affects signalling by migrating into the nucleus and inducing a growth-suppressive programme of gene expression through its direct inhibition of the CRL4DCAF1 E3 ubiquitin ligase. In addition, Merlin promotes the establishment of epithelial adhesion and polarity by recruiting Par3 and aPKC to E-cadherin-dependent junctions, and by ensuring the assembly of tight junctions. These recent advances suggest that Merlin acts at the cell cortex and in the nucleus in a similar, albeit antithetic, manner to the oncogene β-catenin.