The NOD (nucleotide-binding oligomerization domain) proteins NOD1 and NOD2 have important roles in innate immunity as sensors of microbial components derived from bacterial peptidoglycan. The importance of these molecules is underscored by the fact that mutations in the gene that encodes NOD2 occur in a subpopulation of patients with Crohn's disease, and NOD1 has also been shown to participate in host defence against infection with Helicobacter pylori. Here, we focus on the molecular interactions between these NOD proteins and other intracellular molecules to elucidate the mechanisms by which NOD1 and NOD2 contribute to the maintenance of mucosal homeostasis and the induction of mucosal inflammation.