The neurofibromatosis 2 tumor suppressor protein, merlin or schwannomin, functions as a negative growth regulator; however, its mechanism of action is not known. In an effort to determine how merlin regulates cell growth, we analyzed a recently identified novel merlin interactor, hepatocyte growth factor-regulated tyrosine kinase substrate (HRS). We demonstrate that regulated overexpression of HRS in rat schwannoma cells results in similar effects as overexpression of merlin, including growth inhibition, decreased motility and abnormalities in cell spreading. Previously, we showed that merlin forms an intramolecular association between the N-and C-termini and exists in 'open' and 'closed' conformations. Merlin interacts with HRS in the unfolded, or open, conformation. This HRS binding domain maps to merlin residues 453-557. Overexpression of C-terminal merlin has no effect on HRS function, arguing that merlin binding to HRS does not negatively regulate HRS growth suppressor activity. These results suggest the possibility that merlin and HRS may regulate cell growth in schwannoma cells through interacting pathways.