Although Toll-like receptor 4 (TLR4)- and nucleotide-binding oligomerization domain 2 (NOD2)-mediated signaling mechanisms have been extensively studied individually, the crosstalk between them in the regulation of intestinal mucosal defense and tissue homeostasis has been underappreciated. Here, we uncover some novel activities of NOD2 by gene expression profiling revealing the global nature of the cross-regulation between TLR4- and NOD2-mediated signaling. Specifically, NOD2 is able to sense the intensity of TLR4-mediated signaling, resulting in either synergistic stimulation of Interluekin-12 (IL-12) production when the TLR signaling intensity is low; or in the inhibition of IL-12 synthesis and maintenance of intestinal mucosal homeostasis when the TLR signaling intensifies. This balancing act is mediated through receptor-interacting serine/threonine kinase 2, and the transcriptional regulator CCAAT/enhancer-binding protein α (C/EBPα) via its serine 248 phosphorylation by Protein Kinase C. Mice deficient in C/EBPα in the hematopoietic compartment are highly susceptible to chemically induced experimental colitis in an IL-12-dependent manner. Additionally, in contrast to the dogma, we find that the major Crohn's disease-associated NOD2 mutations could cause a primarily immunodeficient phenotype by selectively impairing TLR4-mediated IL-12 production and host defense. To restore the impaired homeostasis would be a way forward to developing novel therapeutic strategies for inflammatory bowel diseases.