Humans are colonized by a large and diverse bacterial flora (the microbiota) essential for the development of the gut immune system. A broader role for the microbiota as a major modulator of systemic immunity has been proposed; however, evidence and a mechanism for this role have remained elusive. We show that the microbiota are a source of peptidoglycan that systemically primes the innate immune system, enhancing killing by bone marrow-derived neutrophils of two major pathogens: Streptococcus pneumoniae and Staphylococcus aureus. This requires signaling via the pattern recognition receptor nucleotide-binding, oligomerization domain-containing protein-1 (Nod1, which recognizes meso-diaminopimelic acid (mesoDAP)-containing peptidoglycan found predominantly in Gram-negative bacteria), but not Nod2 (which detects peptidoglycan found in Gram-positive and Gram-negative bacteria) or Toll-like receptor 4 (Tlr4, which recognizes lipopolysaccharide). We show translocation of peptidoglycan from the gut to neutrophils in the bone marrow and show that peptidoglycan concentrations in sera correlate with neutrophil function. In vivo administration of Nod1 ligands is sufficient to restore neutrophil function after microbiota depletion. Nod1(-/-) mice are more susceptible than wild-type mice to early pneumococcal sepsis, demonstrating a role for Nod1 in priming innate defenses facilitating a rapid response to infection. These data establish a mechanism for systemic immunomodulation by the microbiota and highlight potential adverse consequences of microbiota disruption by broad-spectrum antibiotics on innate immune defense to infection.