Merloni was nicknamed "Sweet Lou" by Boston fans since he was born in Framingham, Massachusetts. He graduated from Providence College in 1993 and still holds several single-season and career records for the now-defunct Friars baseball team.

Merloni was a replacement player during the 1994 Major League Baseball strike and is therefore barred from membership in the Major League Baseball Players Association.

After beginning the 2006 season in Triple-A, Merloni was called up to the Cleveland Indians on May 17, 2006. Merloni signed a contract with the Oakland Athletics for the 2007 season. He played the season for the A's Triple-A affiliate, the Sacramento River Cats. Merloni was chosen as the Most Valuable Player in the 2007 Bricktown Showdown, leading the River Cats over the Richmond Braves by a final score of 7-1. He was also voted Best Defensive Player and Best Teammate for the 2007 season. Merloni contributed a home run and 4 RBI in the game. Before the game, Merloni was chosen as the River Cats' team captain.

Beginning in March 2008, Merloni began appearing on WEEI-AM's "Big Show" as a co-host. On May 27, 2008, Merloni joined the New England Sports Network (NESN) as a commentator on the Red Sox pre-game and post-game shows. After the 2008 season Merloni decided not to remain with NESN. Merloni was hired by Comcast SportsNet New England during the 2009 season as an analyst and reporter.

In the offseasons of 1996 and 1997, Merloni served as a substitute gym teacher at Framingham High School, where he attended high school.

On June 6, 2010, it was announced Merloni would be inducted into the Cape Cod Baseball League Hall of Fame as part of their 2010 Class on November 20. He played for the Bourne Braves in 1991 and the Cotuit Kettleers in 1992.

During an appearance May 9, 2009, on WEEI's The Baseball Show, Merloni claimed that the Red Sox organization had a doctor brief the players during spring training on how to correctly use steroids. Merloni claims the session did not encourage players to use steroids, but rather informed players that there were right and wrong ways to use them. Merloni stated "It was like teaching your teenage daughter about sex education. The organization acknowledged that there were likely players using steroids and basically 'if you're gonna use them, this is how you use them so you don't abuse them'". Merloni could not remember the name of the doctor nor the year in which the briefing took place.

Merloni's claim was quickly refuted by former Red Sox General Manager Dan Duquette who stated "It's ridiculous. It's totally unfounded ... If there was such a doctor, he wasn't in the employ of the Red Sox. We brought in doctors to educate the players on the major league drug policy at the time, at the recommendation of Major League Baseball".

Former Red Sox player Troy O'Leary was interviewed and stated he didn't remember the incident. "I remember the normal union meetings in spring training where they'd talk about drugs and steroids, and I remember doctors talking negatively about them, but I don't remember ever hearing anything like, 'OK, this is the right way to do steroids.' If that happened, I missed that one."

Merloni's account conflicted with former major league pitcher John Rocker who previously stated that a doctor hired by the Major League Baseball Players Association told Alex Rodriguez, Iván Rodríguez, Rafael Palmeiro and him how to use steroids after a spring training lecture in 2002.