Merlin loss causes benign tumours of the nervous system, mainly schwannomas and meningiomas. Schwannomas show enhanced Rac1 and Cdc42 activity, the p21-activated kinase 2 (PAK2) activation and increased ruffling and cell adhesion. PAK regulates activation of merlin. PAK has been proposed as a potential therapeutic target in schwannomas. However where PAK stands in the Rac pathway is insufficiently characterised. We used a novel small-molecule PAK inhibitor, IPA-3, to investigate the role of PAK activation on Rac1/Cdc42 activity, cell spreading and adhesion in human primary schwannoma and Schwann cells. We show that IPA-3 blocks activation of PAK2 at Ser192/197 that antagonises PAK's interaction with Pix. Accordingly, Pix-mediated Rac1 activation is decreased in IPA-3 treated schwannoma cells, indicating that PAK acts upstream of Rac. We show that this Rac activation at the level of focal adhesions in schwannoma cells is essential for cell spreading and adhesion in Schwann and schwannoma cells.