Background & Aims: Mutations in the CARD15 gene encoding NOD2 are susceptibility factors in Crohn's disease. We explored the mechanism of this susceptibility using mice that over express NOD2. Methods: Cellular and molecular responses of mice bearing an NOD2 transgene or administered plasmids that express wild-type and mutated NOD2 constructs were examined. Results: In initial studies, we showed that splenocytes from NOD2 transgenic mice as compared with littermate controls exhibit decreased interleukin (IL)-12p70 responses to peptidoglycan (PGN), a TLR2 ligand that contains muramyl dipeptide, but not other TLR ligands; in contrast, IL-12 responses to PAM3CSK4, a TLR2 ligand that does not contain muramyl dipeptide, were normal. Similarly, transgenic mice as compared with controls exhibited greatly decreased IL-12p40 responses to intraperitoneal administration of PGN but not to lipopolysaccharide. In further studies, we showed using electrophoretic mobility shift assay that PGN-stimulated cells from transgenic mice exhibited decreased activation of nuclear factor κB. Finally, in a series of studies on the effect of the NOD2 on susceptibility to induced colitis, we found that (1) transgenic mice were highly resistant to induction of PGN colitis and partially resistant to induction of trinitrobenzene sulfonic acid (TNBS) colitis and (2) mice administered a plasmid expressing a wild-type NOD2 gene were completely resistant to TNBS colitis whereas mice administered a plasmid expressing an NOD2 gene with the Crohn's disease frameshift mutation were only slightly resistant to TNBS colitis. Conclusions: These data offer new evidence that NOD2 mutations contribute to inflammatory bowel disease by causing excessive TLR2 cytokine responses.