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Nod2, a member of the Apaf1/Nod protein family, confers responsiveness to bacterial products and activates NF-kappaB, a transcription factor that plays a central role in innate immunity. Recently, genetic variation in Nod2 has been associated with susceptibility to Crohn's disease. Here, we report that expression of Nod2 is induced upon differentiation of CD34(+) hematopoietic progenitor cells into granulocyte or monocyte/macrophages. In peripheral blood cells, the highest levels of Nod2 were observed in CD14(+) (monocytes), CD15(+) (granulocytes), and CD40(+)/CD86(+) (dendritic cells) cell populations. Notably, stimulation of myeloblastic and epithelial cells with bacterial lipopolysaccharide or TNFalpha resulted in up-regulation of Nod2. A search for consensus sites within the Nod2 promoter revealed a NF-kappaB binding element that was required for transcriptional activity in response to TNFalpha. Moreover, ectopic expression of p65 induced transactivation, whereas that of dominant-negative IkappaBalpha blocked the transcriptional activity of the Nod2 promoter. Upon stimulation with TNFalpha or lipopolysaccharide, both p50 and p65 subunits of NF-kappaB were bound to the Nod2 promoter. Thus, Nod2 expression is enhanced by proinflammatory cytokines and bacterial components via NF-kappaB, a mechanism that may contribute to the amplification of the innate immune response and susceptibility to inflammatory disease.