Luis Merlo was born on June 13, 1966, in Madrid. As a child, he frequently traveled with his parents, Carlos Larrañaga and María Luisa Merlo, who were also actors, and he became accustomed to see them on their theatrical tours, both performing and backstage, along with his three siblings: Amparo Larrañaga, Kako Larrañaga, and Pedro Larrañaga, who is married to the Actress Maribel Verdú.

As a young man, Merlo took dance classes for a year, after which he studied a degree in Drama. When Merlo had finished his studies, Mario Gas gave him his very first acting role in a version of Salomé, produced by the Núria Espert company in 1985.

In 1986 he made his cinema debut with Hay que deshacer la casa, in which he played a young boy who sexually molested an old woman, a role played by Merlo's aunt, Amparo Rivelles. He finished that year touring with La última luna menguante, directed by Manuel Collado, with whom he also did the play Séneca, o el beneficio de la duda in 1987, starring José Luis Pellicena. Soon afterwards, he had his first starring role in a movie, La señora, in which he played a bellboy in a hotel.

Away from cinema, he has been a regular face on Spanish television, with notable roles in Aquí no hay quien viva, Hospital Central and El Internado. In 2016, he made his debut in La que se avecina, reuniting with many of his former colleagues from Aquí no hay quien viva.