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Neurofibromatosis type 2 is a group of tumors caused by loss-of-function mutations of a tumor suppressor gene encoding NF2/merlin. Development of chemotherapeutics for this disease, which often threatens the life of young children, has been hampered by a limited information on the signaling function of NF2. NF2 can inhibit Ras-induced malignant transformation. However, the primary (signaling) target of NF2 in the oncogenic pathway has not been previously identified.Here, using a series of NF2 constructs, we show that NF2 inhibits directly the Rac/CDC42-dependent Ser/Thr kinase PAK1, which is essential for both Ras transformation and neurofibromatosis type 1 (NF1), through two separate domains.A mutant of NF2, that lacks the PAK1-inhibiting domain of 78 amino acids (NF78C, residues 447–524), fails to suppress Ras transformation. Furthermore, PAK1-specific inhibitors CEP-1347 and WR-PAK18 selectively inhibit the growth of NF2-deficient cancer cells, but not NF2-positive cells.These results suggest that PAK1 is essential for the malignant growth of NF2-deficient cells, and that PAK1-blocking drugs could be potentially useful for the treatment of neurofibromatosis types 2, in addition to Ras-induced cancers and neurofibromatosis type 1.