Transforming growth factor beta (TGF-beta) family ligands are pleotropic proteins with diverse cell-type-specific effects on growth and differentiation. For example, PAK2 activation is critical for the proliferative/profibrotic action of TGF-beta on mesenchymal cells, and yet it is not responsive to TGF-beta in epithelial cells. We therefore investigated the regulatory constraints that prevent inappropriate PAK2 activation in epithelial cultures. The results show that the epithelial-enriched protein Erbin controls the function of the NF2 tumor suppressor Merlin by determining the output of Merlin's physical interactions with active PAK2. Whereas mesenchymal TGF-beta signaling induces PAK2-mediated inhibition of Merlin function in the absence of Erbin, Erbin/Merlin complexes bind and inactivate GTPase-bound PAK2 in epithelia. These results not only identify Erbin as a key determinant of epithelial resistance to TGF-beta signaling, they also show that Erbin controls Merlin tumor suppressor function by switching the functional valence of PAK2 binding.
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