In contrast to axons of the central nervous system (CNS), axons of the peripheral nervous system (PNS) show better, but still incomplete and often slow regeneration following injury. The tumor suppressor protein merlin, mutated in the hereditary tumor syndrome Neurofibromatosis type 2 (NF2), has recently been shown to have RhoA regulatory functions in PNS neurons-in addition to its well-characterized, growth-inhibitory activity in Schwann cells. Here we report that the conditional knockout of merlin in PNS neurons leads to impaired functional recovery of mice following sciatic nerve crush injury, in a gene-dosage dependent manner. Gross anatomical or electrophysiological alterations of sciatic nerves could not be detected. However, correlating with attenuated RhoA activation due to merlin deletion, ultrastructural analysis of nerve samples indicated enhanced sprouting of axons with reduced caliber size and increased myelination compared to wildtype animals. We conclude that deletion of the tumor suppressor merlin in the neuronal compartment of peripheral nerves results in compromised functional regeneration after injury. This mechanism could explain the clinical observation that NF2 patients suffer from higher incidences of slowly recovering facial nerve paralysis after vestibular schwannoma surgery.