Neurofibromatosis 2 (NF2) is a dominantly inherited disorder characterized by bilateral vestibular schwannomas and meningiomas. Merlin, the neurofibromatosis 2 tumor suppressor protein, is related to the ERM (ezrin, radixin, moesin) proteins and, like its family members, is thought to play a role in plasma membrane-cytoskeletal interactions. We report a novel protein as a merlin-specific binding partner that we have named magicin (merlin and Grb2 interacting cytoskeletal protein) and show that the two proteins interact in vitro and in vivo as well as colocalize beneath the plasma membrane. Magicin is a 24 kDa protein that is expressed in many cell lines and tissues. Magicin, similar to merlin, associates with the actin cytoskeleton as determined by cofractionation, immunofluorescence and electron microscopy. Analysis of the magicin sequence reveals binding motifs for the adaptor protein Grb2. Employing affinity binding, blot overlay and co-immunoprecipitation assays, we demonstrate an interaction between Grb2 and magicin. In addition, merlin is capable of forming a ternary complex with magicin and Grb2. These results support a role for merlin in receptor-mediated signaling at the cell surface, and may have implications in the regulation of cytoskeletal reorganization.