Pattern recognition receptor (PRR) that detects bacterial peptidoglycan fragments and other danger signals and thus participates in both innate and adaptive immune responses. Specifically recognizes and binds gamma-D-glutamyl-meso-diaminopimelic acid (iE-DAP), a dipeptide present in peptidoglycan of Gram-negative bacteria. Preferentially binds iE-DAP in tripeptide-containing muropeptides (MurNAc-TriDAP or TriDAP). Ligand binding triggers oligomerization that facilitates the binding and subsequent activation of the proximal adapter receptor-interacting RIPK2. Following recruitment, RIPK2 undergoes 'Met-1'- (linear) and 'Lys-63'-linked polyubiquitination by E3 ubiquitin-protein ligases XIAP, BIRC2, BIRC3 and the LUBAC complex, becoming a scaffolding protein for downstream effectors, triggering activation of the NF-kappa-B and MAP kinases signaling. This in turn leads to the transcriptional activation of hundreds of genes involved in immune response. Also acts as a regulator of antiviral response elicited by dsRNA and the expression of RLR pathway members by targeting IFIH1 and TRAF3 to modulate the formation of IFIH1-MAVS and TRAF3-MAVS complexes leading to increased transcription of type I IFNs. Also acts as a regulator of autophagy via its interaction with ATG16L1, possibly by recruiting ATG16L1 at the site of bacterial entry. Besides recognizing pathogens, also involved in the endoplasmic reticulum stress response: acts by sensing and binding to the cytosolic metabolite sphingosine-1-phosphate generated in response to endoplasmic reticulum stress, initiating an inflammation process that leads to activation of the NF-kappa-B and MAP kinases signaling. In addition, plays a role in insulin trafficking in beta cells in a cell-autonomous manner. Mechanistically, upon recognizing cognate ligands, NOD1 and RIPK2 localize to insulin vesicles where they recruit RAB1A to direct insulin trafficking through the cytoplasm.; [Isoform 3]: In contrast to isoform 1, does not efficiently recognize and bind gamma-D-glutamyl-meso-diaminopimelic acid (iE-DAP) ligand.