Background & Aims: NOD2, a member of the NOD1/Apaf-1 family, was recently identified as the first susceptibility gene for Crohn's disease. The aim of this report was to describe the regulation and functional significance of NOD2 expression in intestinal epithelial cells. Methods: Expression of NOD2 messenger RNA was determined by reverse-transcription polymerase chain reaction (RT-PCR); NOD2 protein was detected by Western blot. Promoter activity was assessed by reporter gene assays and DNA-binding of NF-κB by electrophoretic mobility shift assays. IL-8 production was investigated by RT-PCR and enzyme-linked immunosorbent assay. Results: TNF-α induced an up-regulation of NOD2 in epithelial cell lines (HT-29, SW620, SW948, HeLa S3) and in primary colonic epithelial cells. A synergism was seen by cotreatment with IFN-γ. Two NF-κB binding sites were identified in the promoter. Deletion of either site or overexpression of dominant negative IκBα led to reduced levels of TNF-α/IFN-γ-stimulated reporter gene activity. The identified κB3 site was bound by NF-κB as determined by gelshift assays. Elevated amounts of NOD2 protein were also found in colonic epithelial cells from patients with IBD. LPS induced high levels of IL-8 production in SW620 cells overexpressing NOD2. Conclusions: TNF-α(/IFN-γ) treatment up-regulates the expression of the NOD2 gene in intestinal epithelial cells and subsequently increases their LPS susceptibility. Together with the mutation-derived truncation and functional change of the NOD2 protein, this could be part of the complex pathophysiology of barrier disruption as it is observed in inflammatory bowel diseases.