Nucleotide-binding oligomerization domain 2 (NOD2) is an intracellular receptor for muramyl dipeptide derived from the intestinal microbiota. Loss-of-function mutations in Nod2 are associated with the development of Crohn's disease, suggesting that NOD2 signaling plays critical roles in the maintenance of intestinal immune homeostasis. Although NOD2 activation prevents the development of short-term experimental colitis, it remains unknown whether the sensitivity to long-term experimental colitis is influenced by NOD2. In this study, we explored the roles played by NOD2 in the development of long-term adoptive transfer colitis. Unexpectedly, we found that Rag1-/-Nod2-/- mice were more resistant to adoptive transfer colitis than Rag1-/- mice and had reduced proinflammatory cytokine responses and enhanced accumulation of regulatory T cells (Tregs) expressing forkhead box P3 in the colonic mucosa. Prevention of colitis in Rag1-/-Nod2-/- mice was mediated by TGF-β1 because neutralization of TGF-β1 resulted in the development of more severe colitis due to reduced accumulation of Tregs. Such paradoxical Treg responses in the absence of NOD2 could explain why Nod2 mutations in humans are not sufficient to cause Crohn's disease.