Both NOD2 (CARD15) alleles are mutated in roughly 15% of patients with Crohn's disease, but functional effects are unclear. We analysed the cytokine response of peripheral blood mononuclear cells to muramyl dipeptide (MDP), the ligand for NOD2. MDP induced little TNFα or interleukin 1β, but strong interleukin-8 secretion. MDP also substantially upregulated secretion of TNFα and interleukin 1β induced by toll-like receptor ligands. These effects were abolished by the most common Crohn's NOD2 double mutant genotypes at low nanomolar MDP concentrations, and provide the basis to develop a test of NOD2 functional deficiency. In Crohn's disease, there are defects in neutrophil recruitment driven by NOD2 and interleukin 8 and in cross talk between the NOD2 and toll-like receptor pathways, which suggests that the immune system fails to receive an early priming signal.