It is well established that polymorphisms of the caspase activation and recruitment domain 15 (CARD15) gene, a major risk factor in Crohn's disease (CD), lead to loss of nucleotide-binding oligomerization domain 2 (NOD2) function. However, a molecular explanation of how such loss of function leads to increased susceptibility to CD has remained unclear. In a previous study exploring this question, we reported that activation of NOD2 in human dendritic cells by its ligand, muramyl dipeptide (MDP), negatively regulates Toll-like receptor (TLR)-mediated inflammatory responses. Here we show that NOD2 activation results in increased interferon regulatory factor 4 (IRF4) expression and binding to tumor necrosis factor receptor associated factor 6 (TRAF6) and RICK (receptor interacting serine-threonine kinase). We then show that such binding leads to IRF4-mediated inhibition of Lys63-linked polyubiquitination of TRAF6 and RICK and thus to downregulation of nuclear factor (NF)-κB activation. Finally, we demonstrate that protection of mice from the development of experimental colitis by MDP or IRF4 administration is accompanied by similar IRF4-mediated effects on polyubiquitination of TRAF6 and RICK in colonic lamina propria mononuclear cells. These findings thus define a mechanism of NOD2-mediated regulation of innate immune responses to intestinal microflora that could explain the relation of CARD15 polymorphisms and resultant NOD2 dysfunction to CD.