Nod2 is an intracellular innate immune receptor that plays a role in host defense and susceptibility to inflammatory disease. We show in this study that macrophages rendered refractory to TLR4 and Nod2 signaling by exposure to LPS and muramyl dipeptide (MDP) exhibit impaired TNF-alpha and IL-6 production in response to pathogenic Listeria monocytogenes and Yersinia pseudotuberculosis as well as commensal bacteria including Escherichia coli and Bacteroides fragilis. Surprisingly, Nod2 deficiency was associated with impaired tolerization in response to pathogenic and commensal bacteria. Mechanistically, reduced tolerization of Nod2-null macrophages was mediated by recognition of bacteria through Nod1 because it was abolished in macrophages deficient in Nod1 and Nod2. Consistently, Nod2-null macrophages tolerant to LPS and MDP showed enhanced production of TNF-alpha and IL-6 as well as increased NF-kappaB and MAPK activation in response to the dipeptide KF1B, the Nod1 agonist. Furthermore, reduced tolerization of Nod2-deficient macrophages in response to bacteria was abolished when mutant macrophages were also rendered tolerant to the Nod1 ligand. Finally, MDP stimulation induced refractoriness not only to MDP, but also to iE-DAP stimulation, providing a mechanism to explain the reduced tolerization of Nod2-deficient macrophages infected with bacteria. These results demonstrate that cross-tolerization between Nod1 and Nod2 leads to increase recognition of both pathogenic and commensal bacteria in Nod2-deficient macrophages pre-exposed to microbial ligands.