Sensory systems for detecting tactile stimuli have evolved from touch-sensing nerves in invertebrates to complicated tactile end organs in mammals. Merkel discs are tactile end organs consisting of Merkel cells and Aβ-afferent nerve endings and are localized in fingertips, whisker hair follicles, and other touch-sensitive spots. Merkel discs transduce touch into slowly adapting impulses to enable tactile discrimination, but their transduction and encoding mechanisms remain unknown. Using rat whisker hair follicles, we show that Merkel cells rather than Aβ-afferent nerve endings are primary sites of tactile transduction and identify the Piezo2 ion channel as the Merkel cell mechanical transducer. Piezo2 transduces tactile stimuli into Ca2+-action potentials in Merkel cells, which drive Aβ-afferent nerve endings to fire slowly adapting impulses. We further demonstrate that Piezo2 and Ca2+-action potentials in Merkel cells are required for behavioral tactile responses. Our findings provide insights into how tactile end-organs function and have clinical implications for tactile dysfunctions. Display omitted •Merkel cells are primary sites of tactile transduction and encoding•Piezo2 ion channels mediate tactile transduction in Merkel cells•Tactile transduction is encoded as Ca2+-action potentials in Merkel cells•Merkel cell Ca2+-action potentials drive slowly adapting Aβ-afferent impulses Merkel cells transduce the sense of touch in mammals through Piezo2 channel-mediated Ca2+-action potentials that drive the firing of Aβ-afferent nerve endings.