The innate immune system recognizes microbial pathogens via pattern recognition receptors. One such receptor, NOD2, via recognition of muramyl dipeptide (MDP), triggers a distinct network of innate immune responses, including the production of interleukin-32 (IL-32), which leads to the differentiation of monocytes into dendritic cells (DC). NOD2 has been implicated in the pathogenesis of human leprosy, yet it is not clear whether Mycobacterium leprae, which has a distinct MDP structure, can activate this pathway. We investigated the effect of MDP structure on the innate immune response, finding that infection of monocytes with M. leprae induces IL-32 and DC differentiation in a NOD2-dependent manner. The presence of the proximal l-Ala instead of Gly in the common configuration of the peptide side chain of M. leprae did not affect recognition by NOD2 or cytokine production. Furthermore, amidation of the d-Glu residue did not alter NOD2 activation. These data provide experimental evidence that NOD2 recognizes naturally occurring structural variants of MDP.