Legionella pneumophila, an intracellular bacterial pathogen, is the causative agent of Legionnaires' pneumonia. L. pneumophila enhC^- mutants were originally identified as being defective for uptake into host cells. In this work, I found that the absence of EnhC resulted in defective intracellular growth in bone marrow derived macrophages when dissemination of intracellular bacteria to neighboring cells was expected to occur. Culture supernatants containing the secreted products of infected macrophages added to host cells restricted the growth of the ΔenhC mutant, while tumor necrosis factor α (TNF-α), at concentrations similar to those found in macrophage culture supernatants, could reproduce the growth restriction exerted by culture supernatants on ΔenhC. EnhC was shown to be an envelope-associated protein largely localized to bacterial periplasm. Furthermore, I found that EnhC act to interfere with the activity of the L. pneumophila soluble lytic transglycosylase (SltL), an enzyme that can generate anhydro-muropeptide by cleaving peptidoglycan (PG), and reduce the production of anhydro-muropeptide by SltL. Anhydro-muropeptide contains the moiety that can be recognized by Nod1 innate immune sensor. After challenge of cultured cells with L. pneumophila ΔenhC, there was an increased Nod1-dependent NF-κB activation. This abnormal induction of NF-κB was rectified by replacing L. pneumophila SltL with E. coli SltE that has a lower activity on Legionella PG than SltL. Additionally, defective intracellular growth in the absence of EnhC could be reversed by replacing SltL with SltE, suggesting that the interference of the activity of SltL by EnhC is not only required for reduction of Nod1-dependent NF-κB activation but also for efficient intracellular growth. Further arguing the importance of EnhC for avoiding Nod1 recognition, the Δ enhC mutant was as proficient at intracellular growth as wild type bacteria after challenge of macrophages lacking Nod1. My results reveal a novel mechanism used by bacterial pathogen to evade Nod1 recognition by inhibiting an enzyme involved in the production of Nod1 ligands. EnhC, therefore, is a unique virulence factor that is required for growth in TNF-α stimulated macrophages and evasion from Nod1 recognition.