Merrill Arthur Sappington, 36, a retired lieutenant commander in the Navy, died of cancer Wednesday at the Bethesda Naval Medical Center.

Cmdr. Sappington was born into a Navy family at Annapolis and graduated from Wakefield High School in Arlington in 1961. He graduated from the Georgia Institute of Technology with a degree in industrial engineering in 1965.

He was a member of the NROTC at Georgia Tech and upon his graduation he was sworn in as an ensign in the Navy by his father, Merrill H. Sappington, now a retired rear admiral.

Cmdr. Sappington served on destroyers and landing ships and in Vietnam. He was stationed at the Navy Department here from 1974 to 1976 and was assigned to the Naval War College at Newport, R.I., when he became ill. He then was transferred to the Bethesda Naval Hospital, and retired last year.

His decorations include the Navy Commendation Medal, the Presidential Unit Citation, the Navy Unit Commendation and the Vietnamese Gallantry Cross with Palm.

In addition to his parents, of McLean, Cmdr. Sappington's survivors include his wife, the former Donna McPike, and two daughters, Teresa and Kristina, all of Vienna; a sister,Kerry, of Denver; two brothers, John and Jay, both of Ann Arbor, and his grandparents, retired Army Brig. Gen. and Mrs. Homer A. Sappington, of Barnesville, Ga.

The family suggests that expressions of sympathy be in the form of contributions to the Northern Virginia Chapter of the American Cancer Society.