Nucleotide-binding oligomerization domain 2 (NOD2) polymorphisms are independent risk factors for Crohn's disease and graft-versus-host disease (GVHD). In Crohn's disease, the proinflammatory state resulting from NOD2 mutations have been associated with a loss of antibacterial function of enterocytes such as paneth cells. NOD2 has not been studied in experimental allogeneic bone marrow transplantation (allo-BMT). Using chimeric recipients with NOD2(-/-) hematopoietic cells, we demonstrate that NOD2 deficiency in host hematopoietic cells exacerbates GVHD. We found that proliferation and activation of donor T cells was enhanced in NOD-deficient allo-BMT recipients, suggesting that NOD2 plays a role in the regulation of host antigen-presenting cells (APCs). Next, we used bone marrow chimeras in an experimental colitis model and observed again that NOD2 deficiency in the hematopoietic cells results in increased intestinal inflammation. We conclude that NOD2 regulates the development of GVHD through its inhibitory effect on host APC function.