The nucleotide oligomerization domain 2 (NOD2) 3020insC (NOD2fs) mutation increases susceptibility to Crohn's disease (CD), but the mechanism remains controversial. Loss-of-function and gain-of-function phenotypes have been described as a result of NOD2fs. Here, we show that dendritic cells (DC) derived from CD patients homozygous for this mutation respond normally to purified Toll-like receptor (TLR) ligands but fail to up-regulate the costimulatory molecules CD80 and CD86 in response to the NOD2 ligand muramyl dipeptide (MDP). Moreover, they lack MDP-induced enhancement of TLR-mediated tumor necrosis factor alpha, interleukin (IL)-12, and IL-10 production, which is observed in control DC with intact NOD2. These data indicate that the NOD2fs mutation results in a loss-of-function phenotype in human myeloid DC and imply decreased immune regulation by IL-10 as a possible mechanism for this mutation in CD.