Bacterially derived Nod factor is critical in the establishment of the legume/rhizobia symbiosis. Understanding the mechanisms of Nod factor perception and signal transduction in the plant will greatly advance our understanding of this complex interaction. Here, we describe the identification of a new locus, nodulation-signaling pathway 2 (NSP2), of Medicago truncatula that is involved in Nod factor signaling. Mutants at this locus are blocked for Nod factor-induced gene expression and show a reduced root hair deformation response. nsp2 plants also show a complete absence of infection and cortical cell division following Sinorhizobium meliloti inoculation. Nod factor-induced calcium spiking, one of the earliest responses tested, is still functional in these mutant plants. We conclude that the gene NSP2 is a component of the Nod factor signal transduction pathway that lies downstream of the calcium-spiking response.The symbiotic interaction between legumes and rhizobial bacteria accounts for a significant portion of biological nitrogen fixation worldwide. The site of fixation is the nodule, a unique plant organ located on the root, which functions to generate the aerobic environment essential for bacterial survival and nitrogenase activity. Nodule formation involves plant/ bacterial signaling, with the bacterially generated signaling molecule Nod factor playing a critical role (Long, 1996;Downie and Walker, 1999;Oldroyd, 2001).Purified Nod factor, when applied to the appropriate plant host, can induce many of the plant responses associated with exposure to the bacterial symbiont (Downie and Walker, 1999). Nod factors act predominantly on two cell types in the root: epidermal cells and inner cortical cells. In epidermal cells, Nod factor induces depolarization of the plasma membrane, oscillations in cytosolic Ca 2ϩ referred to as calcium spiking, the induction of specific gene expression, and distortion of polar growth in root hairs (Ehrhardt et al., 1992(Ehrhardt et al., , 1996Pichon et al., 1992;Cardenas et al., 2000;Journet et al., 2001). Nod factor also induces mitotic activation of inner cortical cells that ultimately leads to the development of the nodule primordia. The formation of infection threads, that allow the invasion of bacteria into the root cortex, involves Nod factor, but also requires the presence of the rhizobial bacteria, suggesting the possible role of additional bacterial-signaling molecules (Dé-narié et al., 1996;Oldroyd, 2001).Genetic dissection of the Nod factor-signaling pathway has been limited by the availability of a genetically tractable legume system. Medicago truncatula and its symbiotic bacterial partner Sinorhizobium meliloti have been adopted as model organisms for the study of this symbiotic interaction (Cook, 1999). M. truncatula was selected as a model legume for its diploid genetics, relatively small genome, rapid life cycle, and ease of transformation. A number of studies in this species have identified genes critical for the establishment and regulation of the rhizobial sym...