Collective movement of epithelial cells drives essential multicellular organization during various fundamental physiological processes encompassing embryonic morphogenesis, cancer and wound healing. Yet the molecular mechanism that ensures the coordinated movement of many cells remains elusive. Here we show that a tumour suppressor protein, merlin, coordinates collective migration of tens of cells, by acting as a mechanochemical transducer. In a stationary epithelial monolayer and also in three-dimensional human skin, merlin localizes to cortical cell-cell junctions. During migration initiation, a fraction of cortical merlin relocalizes to the cytoplasm. This relocalization is triggered by the intercellular pulling force of the leading cell and depends on the actomyosin-based cell contractility. Then in migrating cells, taking its cue from the intercellular pulling forces, which show long-distance ordering, merlin coordinates polarized Rac1 activation and lamellipodium formation on the multicellular length scale. Together, these results provide a distinct molecular mechanism linking intercellular forces to collective cell movements in migrating epithelia.