Bacterial cell wall muramyl dipeptide (MDP) and glucosaminyl-MDP (GMDP) are potent activators of innate immunity. Two receptor targets, NOD2 and YB1, have been reported; we investigated potential overlap of NOD2 and YB1 pathways. Separate knockdown of NOD2 and YB1 demonstrates that both contribute to GMDP induction of NF-κB expression, a marker of innate immunity, although excess YB1 led to induction in the absence of NOD2. YB1 and NOD2 co-migrated on sucrose gradient centrifugation, and GMDP addition led to the formation of higher molecular mass complexes containing both YB1 and NOD2. Co-immunoprecipitation demonstrated a direct interaction between YB1 and NOD2, a major recombinant fragment of NOD2 (NACHT-LRR) bound to YB1, and complex formation was stimulated by GMDP. We also report subcellular colocalization of NOD2 and YB1. Although YB1 may have other binding partners in addition to NOD2, maximal innate immunity activation by muramyl peptides is mediated via an interaction between YB1 and NOD2.