The innate immune system uses Toll family receptors to signal for the presence of microbes and initiate host defense. Bacterial lipoproteins (BLPs), which are expressed by all bacteria, are potent activators of Toll-like receptor-2 (TLR2). Here we show that the adaptor molecule, myeloid differentiation factor 88 (MyD88), mediates both apoptosis and nuclear factor-κB (NF-κB) activation by BLP-stimulated TLR2. Inhibition of the NF-κB pathway downstream of MyD88 potentiates apoptosis, indicating that these two pathways bifurcate at the level of MyD88. TLR2 signals for apoptosis through MyD88 via a pathway involving Fas-associated death domain protein (FADD) and caspase 8. Moreover, MyD88 binds FADD and is sufficient to induce apoptosis. These data indicate that TLR2 is a novel ‘death receptor’that engages the apoptotic machinery without a conventional cytoplasmic death domain. Through TLR2, BLP induces the synthesis of the precursor of the pro-inflammatory cytokine interleukin-1β (IL-1β). Interestingly, BLP also activates caspase 1 through TLR2, resulting in proteolysis and secretion of mature IL-1β. These results indicate that caspase activation is an innate immune response to microbial pathogens, culminating in apoptosis and cytokine production.