Enables muramyl dipeptide binding activity. Involved in several processes, including cellular response to peptidoglycan; positive regulation of dendritic cell cytokine production; and response to muramyl dipeptide. Located in cytoplasm. Biomarker of colitis; middle cerebral artery infarction; and pancreatitis. Human ortholog(s) of this gene implicated in several diseases, including Blau syndrome; autoimmune disease (multiple); gastrointestinal carcinoma; intestinal disease (multiple); and lung disease (multiple). Orthologous to human NOD2 (nucleotide binding oligomerization domain containing 2). [provided by Alliance of Genome Resources, Apr 2022]