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Abstract Background A universal adaptor protein, MyD88, orchestrates the innate immune response by propagating signals from toll-like receptors (TLRs) and interleukin-1 receptor (IL-1R). Receptor activation seeds MyD88 dependent formation of a signal amplifying supramolecular organizing center (SMOC)—the myddosome. Alternatively spliced variant MyD88S, lacking the intermediate domain (ID), exhibits a dominant negative effect silencing the immune response, but the mechanistic understanding is limited. Methods Luciferase reporter assay was used to evaluate functionality of MyD88 variants and mutants. The dimerization potential of MyD88 variants and myddosome nucleation process were monitored by co-immunoprecipitation and confocal microscopy. The ID secondary structure was characterized in silico employing I-TASSER server and in vitro using nuclear magnetic resonance (NMR) and circular dichroism (CD). Results We show that MyD88S is recruited to the nucleating SMOC and inhibits its maturation by interfering with incorporation of additional components. Biophysical analysis suggests that important functional role of ID is not supported by a well-defined secondary structure. Mutagenesis identifies Tyr116 as the only essential residue within ID required for myddosome nucleation and signal propagation (NF-κB activation). Conclusions Our results argue that the largely unstructured ID of MyD88 is not only a linker separating toll-interleukin-1 receptor (TIR) homology domain and death domain (DD), but contributes intermolecular interactions pivotal in MyD88-dependent signaling. The dominant negative effect of MyD88S relies on quenching the myddosome nucleation and associated signal transduction. Video abstract