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Nucleic acid sensing is a critical mechanism by which the immune system monitors for pathogen invasion. A set of germline‐encoded innate immune receptors detect microbial DNA in various compartments of the cell, such as endosomes, the cytosol, and the nucleus. Sensing of microbial DNA through these receptors stimulates, in most cases, interferon regulatory factor‐dependent type I IFN synthesis followed by JAK/STAT‐dependent interferon‐stimulated gene expression. In contrast, the detection of DNA in the cytosol by AIM2 assembles a macromolecular complex called the inflammasome, which unleashes the proteolytic activity of a cysteine protease caspase‐1. Caspase‐1 cleaves and activates the pro‐inflammatory cytokines such as IL‐1β and IL‐18 and a pore‐forming protein, gasdermin D, which triggers pyroptosis, an inflammatory form of cell death. Research over the past decade has revealed that AIM2 plays essential roles not only in host defense against pathogens but also in inflammatory diseases, autoimmunity, and cancer in inflammasome‐dependent and inflammasome‐independent manners. This review discusses the latest advancements in our understanding of AIM2 biology and its functions in health and disease. [ABSTRACT FROM AUTHOR]