Participates in the innate immune response to microbial agents. Specifically recognizes diacylated and triacylated lipopeptides. Cooperates with TLR2 to mediate the innate immune response to bacterial lipoproteins or lipopeptides. Forms the activation cluster TLR2:TLR1:CD14 in response to triacylated lipopeptides, this cluster triggers signaling from the cell surface and subsequently is targeted to the Golgi in a lipid-raft dependent pathway. Acts via MYD88 and TRAF6, leading to NF-kappa-B activation, cytokine secretion and the inflammatory response (By similarity). Acts as a coreceptor for M.tuberculosis lipoproteins LprG, LpqH and PhoS1 (pstS1), in conjunction with TLR2 and for some but not all lipoproteins CD14 and/or CD36. The lipoproteins act as agonists to modulate antigen presenting cell functions in response to the pathogen (PubMed:19362712). Interacts (via extracellular domain) with TLR2. TLR2 seems to exist in heterodimers with either TLR1 or TLR6 before stimulation by the ligand. The heterodimers form bigger oligomers in response to their corresponding ligands as well as further heterotypic associations with other receptors such as CD14 and/or CD36 (By similarity). Binds MYD88 (via TIR domain). Interacts with CNPY3 (PubMed:17998391). Does not reside in lipid rafts before stimulation but accumulates increasingly in the raft upon the presence of the microbial ligand. In response to triacylated lipoproteins, TLR2:TLR1 heterodimers are recruited in lipid rafts, this recruitment determine the intracellular targeting to the Golgi apparatus. Belongs to the Toll-like receptor family. In some plant proteins and in human SARM1, the TIR domain has NAD(+) hydrolase (NADase) activity (By similarity). However, despite the presence of the catalytic Asp residue, the isolated TIR domain of human TLR4 lacks NADase activity (By similarity). Based on this, it is unlikely that Toll-like receptors have NADase activity.