The ezrin-radixin-moesin (ERM) family of proteins have emerged as key regulatory molecules in linking F-actin to specific membrane proteins, especially in cell surface structures. Merlin, the product of the NF2 tumor suppressor gene, has sequence similarity to ERM proteins and binds to some of the same membrane proteins, but lacks a C-terminal F-actin binding site. In this review we discuss how ERM proteins and merlin are negatively regulated by an intramolecular association between their N- and C-terminal domains. Activation of at least ERM proteins can be accomplished by C-terminal phosphorylation in the presence of PIP₂. We also discuss membrane proteins to which ERM and merlin bind, including those making an indirect linkage through the PDZ-containing adaptor molecules EBP50 and E3KARP. Finally, the function of these proteins in cortical structure, endocytic traffic, signal transduction, and growth control is discussed.