The Rip2 kinase contains a caspase recruitment domain (CARD) and has been implicated in the activation of the transcriptional factor NF-кB downstream of Nod-like receptors. However, how Rip2 mediates innate immune responses is still largely unclear. We show that Rip2 and IKK-γ become stably polyubiquitinated upon treatment of cells with the Nod2 ligand, muramyl dipeptide. We demonstrate a requirement for the E2 conjugating enzyme Ubc13, the E3 ubiquitin ligase Traf6 and the ubiquitin activated kinase Tak1 in Nod2-mediated NF-кB activation. We also show that M. tuberculosisinfection stimulates Rip2 polyubiquitination. Collectively, this study revealed that the Nod2 pathway is ubiquitin regulated and that Rip2 employs a ubiquitin-dependent mechanism to achieve NF-кB activation. We also demonstrate that intraphagosomal M. tuberculosis stimulates the cytosolic Nod2 pathway. We show that upon Mtb infection, Nod2 recognition triggers the expression of type I interferons in a Tbk1- and Irf5-dependent manner. This response is only partially impaired by the loss of Irf3 and therefore, differs fundamentally from those stimulated by bacterial DNA, which depends entirely on this transcription factor. This difference appears to result from the unusual peptidoglycan produced by mycobacteria, which we show is a uniquely potent agonist of the Nod2/Rip2/Irf5 pathway. Thus, the Nod2 system is specialized to recognize bacteria that actively perturb host membranes and is remarkably sensitive to Mycobacteria, perhaps reflecting the strong evolutionary pressure exerted by these pathogens on the mammalian immune system.