Secretion of anti-serpin B13 autoantibodies in young diabetes-prone nonobese diabetic mice is associated with reduced inflammation in pancreatic islets and a slower progression to autoimmune diabetes. Injection of these mice with a monoclonal antibody (mAb) against serpin B13 also leads to fewer inflammatory cells in the islets and more rapid recovery from recent-onset diabetes. The exact mechanism by which anti-serpin activity is protective remains unclear. We found that serpin B13 is expressed in the exocrine component of the mouse pancreas, including the ductal cells. We also found that anti-serpin B13 mAb blocked the inhibitory activity of serpin B13, thereby allowing partial preservation of the function of its target protease. Consistent with the hypothesis that anti-clade B serpin activity blocks the serpin from binding, exposure to exogenous anti-serpin B13 mAb or endogenous anti-serpin B13 autoantibodies resulted in cleavage of the surface molecules CD4 and CD19 in lymphocytes that accumulated in the pancreatic islets and pancreatic lymph nodes but not in the inguinal lymph nodes. This cleavage was inhibited by an E64 protease inhibitor. Consequently, T cells with the truncated form of CD4 secreted reduced levels of interferon-γ. We conclude that anti-serpin antibodies prevent serpin B13 from neutralizing proteases, thereby impairing leukocyte function and reducing the severity of autoimmune inflammation.