Peptidoglycan recognition proteins (PGRPs) are pattern recognition receptors of the innate immune system that bind, and in some cases hydrolyse, bacterial peptidoglycans (PGNs). We determined the crystal structure of the C-terminal PGN-binding domain of human PGRP-Ialpha in complex with a muramyl tripeptide representing the conserved core of lysine-type PGNs. The peptide stem of the ligand is buried at the deep end of a long binding groove, with N-acetylmuramic acid situated in the middle of the groove, whose shallow end could accommodate N-acetylglucosamine. Both peptide and glycan moieties are essential for binding by PGRPs. Conservation of key PGN-contacting residues indicates that all PGRPs employ this basic PGN-binding mode. The structure identifies variable residues that likely mediate discrimination between lysine- and diaminopimelic acid-type PGNs. In addition, we propose a mechanism for PGN hydrolysis by Zn2+-containing catalytic PGRPs.