Recognizes muramyl dipeptide (MDP) constituents of bacterial peptidoglycans and plays a key role in gastrointestinal immunity: upon stimulation, binds the proximal adapter receptor-interacting RIPK2, which recruits ubiquitin ligases as XIAP, BIRC2, BIRC3 and the LUBAC complex, triggering activation of MAP kinases and activation of NF-kappa-B signaling, leading to activate the transcription of hundreds of genes involved in immune response.