Nod1 is an intracellular protein that is involved in recognition of bacterial molecules and whose genetic variation has been linked to several inflammatory diseases. Previous studies suggested that the recognition core of Nod1 stimulatory molecules is gamma-D-glutamyl-meso-diaminopimelic acid (iE-DAP), but the identity of the major Nod1 stimulatory molecule produced by bacteria remains unknown. Here we show that bacteria produce lipophilic molecules capable of stimulating Nod1. Analysis of synthetic compounds revealed stereoselectivity of the DAP residue and that conjugation of lipophilic acyl residues specifically enhances the Nod1 stimulatory activity of the core iE-DAP. Furthermore, we demonstrate that lipophilic molecules induce and/or enhance the secretion of innate immune mediators from primary mouse mesothelial cells and human monocytic MonoMac6 cells, and this effect is mediated through Nod1. These results provide insight into the mechanism of immune recognition via Nod1, which might be useful in the design and testing of novel immunoregulators.