Neurofibromatosis 2 (NF2) is an inherited cancer syndrome resulting from mutations in the NF2 tumor suppressor gene. Analysis of NF2 mutations has revealed some general genotype-phenotype correlations. Severe disease has been associated with mutations that produce a premature termination while more mild disease has been associated with missense mutations. Here, we provide experimental proof for these genotype-phenotype correlations by demonstrating that nonsense mutations fail to produce stable merlin protein while missense mutations result in the generation of merlin proteins defective in negative growth regulation. This inability to suppress cell growth may result from defects in the function of merlin at several levels, including failure to form an intramolecular complex. Based on these findings, we propose a model for merlin growth suppression that provides a framework for analyzing NF2 patient mutations and merlin function.