Neurofibromatosis type 2 (NF2) is a multiple neoplasia syndrome and is caused by a mutation of the NF2 tumor suppressor gene that encodes for the tumor suppressor protein merlin. Biallelic NF2 gene inactivation results in the development of central nervous system tumors, including schwannomas, meningiomas, ependymomas, and astrocytomas. Although a wide variety of missense germline mutations in the coding sequences of the NF2 gene can cause loss of merlin function, the mechanism of this functional loss is unknown. To gain insight into the mechanisms underlying loss of merlin function in NF2, we investigated mutated merlin homeostasis and function in NF2-associated tumors and cell lines. Quantitative protein and RT-PCR analysis revealed that whereas merlin protein expression was significantly reduced in NF2-associated tumors, mRNA expression levels were unchanged. Transfection of genetic constructs of common NF2 missense mutations into NF2 gene-deficient meningioma cell lines revealed that merlin loss of function is due to a reduction in mutant protein half-life and increased protein degradation. Transfection analysis also demonstrated that recovery of tumor suppressor protein function is possible, indicating that these mutants maintain intrinsic functional capacity. Further, increased expression of mutant protein is possible after treatment with specific proteostasis regulators, implicating protein quality control systems in the degradative fate of mutant tumor suppressor proteins. These findings provide direct insight into protein function and tumorigenesis in NF2 and indicate a unique treatment paradigm for this disorder.