Known as Mostaza because of his off-blond hair, Merlo played his entire career for Club Atlético River Plate as a defensive midfielder. He was part of the midfield that conquered a string of championships under coach Ángel Labruna between 1975 and 1981, the others being Juan José López and Norberto Alonso. Merlo was, together with goalkeeper Ubaldo Fillol and defender Daniel Passarella, the backbone of that team. River, nonetheless, purchased several players to fill in Merlo's position, because he was considered a great defender, but a liability once the team got the ball. Among them were Ramiro Pérez, Chamaco Rodríguez, Della Savia, Cierra, Carranza, Pitarch, de los Santos, and Américo Gallego, who ultimately earned Merlo's position. Before retirement, Merlo mentored an up-and-coming midfielder: Néstor Gorosito. Both Gallego and Gorosito have since met Merlo as rival coaches. Merlo made over 500 appearances for River. He won seven titles during his time at the club and made 42 appearances in the Superclasico, more than any other player in history.
Managerial career
After the end of his playing career, Merlo studied for an official coach matriculation, and proceeded to train several smaller teams until offered the position of coach at River Plate in 1989, together with Alonso. Merlo and Alonso were dismissed in mid-season after new club president Davicce made good on an election promise to bring Passarella as coach; the team won the championship title, and fans gave Merlo credit for a big part of that success. In 1999, Merlo commanded Atlético Nacional of Colombia during the first half of the season; albeit successful, his managerial choices proved unpopular, and he resigned from his position. He was subsequently replaced by Luis Fernando Suarez, who would eventually win the tournament. Fans later gave credit to Merlo for his part on the title. In 2001, Merlo did the almost-impossible and coached the team that ended a 35-year drought for Racing Club. His serenity and his insistence on taking things one match at a time earned him his nickname "paso a paso", after the sentence he often told anxious fans and reporters. When Carlos Bilardo left Estudiantes de La Plata in 2004, Merlo was offered the post of coach; the team advanced from relegation danger to the top positions, being a contender both in the 2004 Apertura and the 2005 Clausura. Merlo recalls fondly that both his debut and his first goal were both against Estudiantes . In August 2005, Merlo resigned from his post in Estudiantes. A few weeks later, Leonardo Astrada resigned as River Plate coach, and Merlo was brought in his place. On January 9, 2006, following a dim campaign in which River failed to contend for the 2005 Apertura, Merlo resigned as River Plate coach, and Passarella was called to fill in. There is controversy about the way he left River Plate during that pre-season of 2006. It is said that Marcelo Gallardo told him that neither he nor his teammates agreed with "his project", and that led to many discussions that made Merlo quit the team, and Gallardo is still blamed for Mostaza's sudden departure. Merlo since went on to unsuccessful spells as managers at Racing Club de Avellaneda and Barcelona Sporting Club of Ecuador. In 2009, he became the manager of Rosario Central but left the club on 15 April 2009 after only five games in charge because of personal problems with the player Ezequiel González. Merlo returned to managerial functions on February 2013, hired by Club Douglas Haig, playing in Primera B Nacional.