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Solid tumours can universally evade contact inhibition of proliferation (CIP), a mechanism halting cell proliferation when cell–cell contact occurs. Merlin, an ERM-like protein, crucially regulates CIP and is frequently deactivated in various cancers, indicating its significance as a tumour suppressor in cancer biology. Despite extensive investigations into Merlin's role in cancer, its lack of intrinsic catalytic activity and frequent conformation changes have made it notoriously challenging to study. To address this challenge, we harnessed innovative luciferase technologies to create and validate a NanoBiT split-luciferase biosensor system in which Merlin is cloned between two split components (LgBiT and SmBiT) of NanoLuc luciferase. 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 for exploring its contributions to CIP and tumorigenesis. [ABSTRACT FROM AUTHOR]