There is a strong association between infection and prematurity; however, the underlying mechanisms remain largely unknown. Nod1 and Nod2 are intracellular pattern recognition receptors that are activated by bacterial peptides and mediate innate immunity. We previously demonstrated that human first-trimester trophoblasts express Nod1 and Nod2, which trigger inflammation upon stimulation. This study sought to determine the expression and function of Nod1 and Nod2 in third-trimester trophoblasts, and to characterize the in vivo effects of Nod1 activation on pregnancy outcome. Human term placental tissues and isolated term trophoblast expressed Nod1, but not Nod2. Activation of Nod1 by its agonist, bacterial γ-D-glutamyl-meso-diaminopimelic acid (iE-DAP), in term trophoblast cultures induced a proinflammatory cytokine profile, characterized by elevated levels of secreted IL-6, GRO-α, and MCP-1, when compared with the control. However, these cytokines were not upregulated in response to Nod2 stimulation with bacterial MDP. Administration of high-dose bacterial iE-DAP to pregnant C57BL/6J mice on embryonic day 14.5 triggered preterm delivery within 24 h. iE-DAP at a lower dose that did not induce prematurity, reduced fetal weight, altered the cytokine profile at the maternal-fetal interface, and induced fetal inflammation. Thus, functional Nod1 is expressed by trophoblast cells across gestation and may have a role in mediating infection-associated inflammation and prematurity. This study demonstrates that pattern recognition receptors, other than the TLRs, may be implicated or involved in infection-associated preterm labor.