A new nodulation-defective mutant of Lotus japonicus does not initiate nodule cortical cell division in response to Mesorhizobium loti, but induces root hair deformation, Nod factor-induced calcium spiking, and mycorrhization. This phenotype, together with mapping data, suggested that the mutation could be in the ortholog of the Medicago truncatula NSP1 gene (MtNSP1). The sequence of the orthologous gene (LjNSP1) in the L. japonicus mutant (Ljnsp1-1) revealed a mutation causing a premature stop resulting in loss of the C-terminal 23 amino acids. We also sequenced the NSP2 gene from L. japonicus (LjNSP2). A mutant (Ljnsp2-3) with a premature stop codon was identified by TILLING showing a similar phenotype to Ljnsp1-1. Both LjNSP1 and LjNSP2 are predicted GRAS (GAI, RGA, SCR) domain transcriptional regulators. Transcript steady-state levels of LjNSP1 and LjNSP2 initially decreased and then increased following infection by M. loti. In hairy root transformations, LjNSP1 and MtNSP1 complemented both Mtnsp1-1 and Ljnsp1-1 mutants, demonstrating that these orthologous proteins have a conserved biochemical function. A Nicotiana benthamiana NSP1-like gene (NbNSP1) was shown to restore nodule formation in both Ljnsp1-1 and Mtnsp1-1 mutants, indicating that NSP1 regulators from legumes and non-legumes can propagate the Nod factor-induced signal, activating appropriate downstream targets. The L. japonicus nodules complemented with NbNSP1 contained some cells with abnormal bacteroids and could fix nitrogen. However, the NbNSP1-complemented M. truncatula nodules did not fix nitrogen and contained very few bacteria released from infection threads. These observations suggest that NSP1 is also involved in infection, bacterial release, and normal bacteroid formation in nodule cells.Legumes produce root nodules in response to Nod factors secreted by rhizobia. These Nod factor signals are essential for root hair deformation, induction of early nodulation genes, formation of nodule primordia, and infection by rhizobia. The earliest plant responses to Nod factors include an influx of calcium, plasmamembrane depolarizations, and then induction of cytosolic calcium spiking around the nucleus of epidermal root cells (Oldroyd and Downie, 2004). Purified Nod factors are sufficient to cause a range of early responses involved in the host developmental program (Hirsch and Fang, 1994;Schultze and Kondorosi, 1998;Downie and Walker, 1999). The Nod factors are the principle determinants by which legumes can be nodulated by specific rhizobia; the basis for this host specificity is the structure of the Nod factor, suggesting that highly specific plant receptors perceive Nod factor signals, thereby initiating the plant developmental response.Nod factor-induced root hair deformation is associated with reorganization of actin filaments in preparation for infection (Cardenas et al., 1998;Sieberer et al., 2005). The root hairs bend back, entrapping bacteria and thereby allowing infection foci to form as entrapped microcolonies. The infection thread, i...