Solid tumors universally possess the ability to evade contact inhibition of proliferation (CIP), a mechanism halting cell proliferation when cell-cell contacts occur. Merlin, an ERM-like protein, crucially regulates CIP and is frequently deactivated in various cancers, indicating its signifi-cance as a tumor suppressor in cancer biology. Despite extensive investigations into Merlin's role in cancer, its lack of intrinsic catalytic activity and frequent conformation changes has made it notoriously challenging to study. To address this challenge, we harnessed innovative luciferase technologies to create and validate a split-luciferase biosensor system. This system enables precise quantification of Merlin's conformation and activity both in vitro and within living cells. This biosensor significantly enhances the study of Merlin's molecular functions, serving as a potent tool to explore its contributions to CIP and tumorigenesis.