It recognizes bacterial molecules (peptidoglycans) and stimulates an immune reaction.

[7] NOD2 is an intracellular pattern recognition receptor, which is similar in structure to resistant proteins of plants and recognizes molecules containing the specific structure called muramyl dipeptide (MDP) that is found in certain bacteria.

[8] The C-terminal portion of the protein contains a leucine-rich repeat domain that is known to play a role in protein–protein interactions.

The N-terminal portion contains two CARD domains known to play a role in apoptosis and NF-κB activation pathways.

It plays a role in the immune response by recognizing the bacterial molecules which possess the muramyl dipeptide (MDP) moiety and activating the NF-κB protein.