Pattern recognition receptor (PRR) that detects bacterial peptidoglycan fragments and other danger signals and plays an important role in gastrointestinal immunity (PubMed:12514169, PubMed:12527755, PubMed:12626759, PubMed:15044951, PubMed:15998797, PubMed:27283905, PubMed:27748583, PubMed:31649195). Specifically activated by muramyl dipeptide (MDP), a fragment of bacterial peptidoglycan found in every bacterial peptidoglycan type (PubMed:12514169, PubMed:12527755, PubMed:12626759, PubMed:12871942, PubMed:15044951, PubMed:15198989, PubMed:15998797, PubMed:22857257, PubMed:23322906, PubMed:27748583, PubMed:36002575). NOD2 specifically recognizes and binds 6-O-phospho- MDP, the phosphorylated form of MDP, which is generated by NAGK (PubMed:36002575). 6-O-phospho-MDP-binding triggers oligomerization that facilitates the binding and subsequent activation of the proximal adapter receptor-interacting RIPK2 (PubMed:11087742, PubMed:17355968, PubMed:21887730, PubMed:23806334, PubMed:28436939). Following recruitment, RIPK2 undergoes 'Met-1'- (linear) and 'Lys-63'-linked polyubiquitination by E3 ubiquitin-protein ligases XIAP, BIRC2, BIRC3 and the LUBAC complex, becoming a scaffolding protein for downstream effectors, triggering activation of the NF-kappa-B and MAP kinases signaling (PubMed:11087742, PubMed:12514169, PubMed:12626759, PubMed:15198989, PubMed:21887730, PubMed:23322906, PubMed:23806334, PubMed:28436939). This in turn leads to the transcriptional activation of hundreds of genes involved in immune response (PubMed:15198989). Its ability to detect bacterial MDP plays a central role in maintaining the equilibrium between intestinal microbiota and host immune responses to control inflammation (By similarity). An imbalance in this relationship results in dysbiosis, whereby pathogenic bacteria prevail on commensals, causing damage in the intestinal epithelial barrier as well as allowing bacterial invasion and inflammation (By similarity). Acts as a regulator of appetite by sensing MDP in a subset of brain neurons: microbiota-derived MDP reach the brain, where they bind and activate NOD2 in inhibitory hypothalamic neurons, decreasing neuronal activity, thereby regulating satiety and body temperature (By similarity). NOD2- dependent MDP-sensing of bacterial cell walls in the intestinal epithelial compartment contributes to sustained postnatal growth upon undernutrition (By similarity). Also plays a role in antiviral response by acting as a sensor of single-stranded RNA (ssRNA) from viruses: upon ssRNA-binding, interacts with MAVS, leading to activation of interferon regulatory factor-3/IRF3 and expression of type I interferon (PubMed:19701189). Also acts as a regulator of autophagy in dendritic cells via its interaction with ATG16L1, possibly by recruiting ATG16L1 at the site of bacterial entry (PubMed:20637199). NOD2 activation in the small intestine crypt also contributes to intestinal stem cells survival and function: acts by promoting mitophagy via its association with ATG16L1 (By similarity). In addition to its main role in innate immunity, also regulates the adaptive immune system by acting as regulator of helper T-cell and regulatory T-cells (Tregs) (By similarity). Besides recognizing pathogens, also involved in the endoplasmic reticulum stress response: acts by sensing and binding to the cytosolic metabolite sphingosine-1-phosphate generated in response to endoplasmic reticulum stress, initiating an inflammation process that leads to activation of the NF-kappa-B and MAP kinases signaling (PubMed:27007849, PubMed:33942347). May also be involved in NLRP1 activation following activation by MDP, leading to CASP1 activation and IL1B release in macrophages (PubMed:18511561). {ECO:0000250|UniProtKB:Q8K3Z0, ECO:0000269|PubMed:11087742, ECO:0000269|PubMed:12514169, ECO:0000269|PubMed:12527755, ECO:0000269|PubMed:12626759, ECO:0000269|PubMed:12871942, ECO:0000269|PubMed:15044951, ECO:0000269|PubMed:15198989, ECO:0000269|PubMed:15998797, ECO:0000269|PubMed:17355968, ECO:0000269|PubMed:18511561, ECO:0000269|PubMed:19701189, ECO:0000269|PubMed:20637199, ECO:0000269|PubMed:21887730, ECO:0000269|PubMed:22857257, ECO:0000269|PubMed:23322906, ECO:0000269|PubMed:23806334, ECO:0000269|PubMed:27007849, ECO:0000269|PubMed:27283905, ECO:0000269|PubMed:27748583, ECO:0000269|PubMed:28436939, ECO:0000269|PubMed:31649195, ECO:0000269|PubMed:33942347, ECO:0000269|PubMed:36002575}. [Isoform 2]: Acts as a pattern recognition receptor (PRR); able to activate NF-kappa-B. . [Isoform 3]: Can activate NF-kappa-B in a muramyl dipeptide (MDP)-independent manner. . This is the function of ENSG00000167207 (NOD2, nucleotide binding oligomerization domain containing 2).