Ezrin/radixin/moesin (ERM) family members provide a regulated link between the cortical actin cytoskeleton and the plasma membrane to govern membrane structure and organization. Here, we report the crystal structure of intact insect moesin, revealing that its essential yet previously uncharacterized alpha-helical domain forms extensive interactions with conserved surfaces of the band four-point-one/ezrin/radixin/moesin (FERM) domain. These interdomain contacts provide a functional explanation for how PIP(2) binding and tyrosine phosphorylation of ezrin lead to activation, and provide an understanding of previously enigmatic loss-of-function missense mutations in the tumor suppressor merlin. Sequence conservation and biochemical results indicate that this structure represents a complete model for the closed state of all ERM-merlin proteins, wherein the central alpha-helical domain is an active participant in an extensive set of inhibitory interactions that can be unmasked, in a rheostat-like manner, by coincident regulatory factors that help determine cell polarity and membrane structure.