Osteoblasts produce an array of immune molecules following bacterial challenge that could recruit leukocytes to sites of infection and promote inflammation during bone diseases, such as osteomyelitis. Recent studies from our laboratory have shed light on the mechanisms by which this cell type can perceive and respond to bacteria by demonstrating the functional expression of members of the Toll-like family of cell surface pattern recognition receptors by osteoblasts. However, we have shown that bacterial components fail to elicit immune responses comparable with those seen following challenge with the intracellular pathogens salmonellae and Staphylococcus aureus. In the present study, we show that UV-killed bacteria and invasion-defective bacterial strains elicit significantly less inflammatory cytokine production than their viable wild-type counterparts. Importantly, we demonstrate that murine osteoblasts express the novel intracellular pattern recognition receptors Nod1 and Nod2. Levels of mRNA encoding Nod molecules and protein expression are significantly and differentially increased from low basal levels following exposure to these disparate bacterial pathogens. In addition, we have shown that osteoblasts express Rip2 kinase, a critical downstream effector molecule for Nod signaling. Furthermore, to begin to establish the functional nature of Nod expression, we show that a specific ligand for Nod proteins can significantly augment immune molecule production by osteoblasts exposed to either UV-inactivated bacteria or bacterial lipopolysaccharide. As such, the presence of Nod proteins in osteoblasts could represent an important mechanism by which this cell type responds to intracellular bacterial pathogens of bone.