Nucleotide-binding oligomerization domain-containing proteins (Nods) are intracellular pattern recognition receptors recognizing conserved moieties of bacterial peptidoglycan through their leucine-rich repeats domain. The agonists for Nods activate proinflammatory signaling pathways, including NF-kappaB pathways. The results from our previous studies showed that the activation of TLR4 and TLR2, leucine-rich repeat-containing pattern recognition receptors, were differentially modulated by saturated and n-3 polyunsaturated fatty acids in macrophages and dendritic cells. Here, we show the differential modulation of NF-kappaB activation and interleukin-8 (IL-8) expression in colonic epithelial cells HCT116 by saturated and unsaturated fatty acids mediated through Nods proteins. Lauric acid (C12:0) dose dependently activated NF-kappaB and induced IL-8 expression in HCT116 cells, which express both Nod1 and Nod2, but not detectable amounts of TLR2 and TLR4. These effects of lauric acid were inhibited by dominant negative forms of Nod1 or Nod2, but not by dominant negative forms of TLR2, TLR4, and TLR5. The effects of lauric acid were also attenuated by small RNA interference targeting Nod1 or Nod2. In contrast, polyunsaturated fatty acids, especially n-3 polyunsaturated fatty acids, inhibited the activation of NF-kappaB and IL-8 expression induced by lauric acid or known Nods ligands in HCT116. Furthermore, lauric acid induced, but docosahexaenoic acid inhibited lauric acid- or Nod2 ligand MDP-induced, Nod2 oligomerization in HEK293T cells transfected with Nod2. Together, these results provide new insights into the role of dietary fatty acids in modulating inflammation in colon epithelial cells. The results suggest that Nods may be involved in inducing sterile inflammation, one of the key etiological conditions in the development of many chronic inflammatory diseases.