Inflammatory bowel disease (IBD) is a debilitating chronic inflammatory disorder of the intestine. The interactions between enteric bacteria and genetic susceptibilities are major contributors of IBD etiology. Although genetic variants with loss or gain of NOD2 functions have been linked to IBD susceptibility, the mechanisms coordinating NOD2 downstream signaling, especially in macrophages, during IBD pathogenesis are not precisely identified. Here, studies utilizing the murine dextran sodium sulfate model of colitis revealed the crucial roles for inducible nitric-oxide synthase (iNOS) in regulating pathophysiology of IBDs. Importantly, stimulation of NOD2 failed to activate Sonic hedgehog (SHH) signaling in iNOS null macrophages, implicating NO mediated cross-talk between NOD2 and SHH signaling. NOD2 signaling up-regulated the expression of a NO-responsive microRNA, miR-146a, that targeted NUMB gene and alleviated the suppression of SHH signaling. In vivo and ex vivo studies confirmed the important roles for miR-146a in amplifying inflammatory responses. Collectively, we have identified new roles for miR-146a that established novel cross-talk between NOD2-SHH signaling during gut inflammation. Potential implications of these observations in therapeutics could increase the possibility of defining and developing better regimes to treat IBD pathophysiology.