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Dysregulated activity of A Disintegrin And Metalloproteinase 17 (ADAM17)/TNFα Converting Enzyme (TACE) is associated with inflammatory disorders and cancer progression by releasing regulatory membrane-tethered proteins like TNFα, IL6R and EGFR ligands. Although specific inhibition of TACE is thought to be a viable strategy for inflammatory disorders and for malignancies treatment, the generation of effective inhibitors in vivo has been proven to be challenging. Here we report on the development of a protein inhibitor that leverages the endogenous modulator of TACE. We have generated a stable form of the auto-inhibitory TACE prodomain (TPD), which specifically inhibits in vitro and cell-surface TACE, but not the related ADAM10, and effectively modulated TNFα secretion in cells. TPD significantly attenuated TACE-mediated disease models of sepsis, rheumatoid arthritis (RA) and inflammatory bowel disease (IBD), and reduced TNFα in synovial fluids from RA patients. Our results demonstrate that intervening with endogenous ADAM sheddase modulatory mechanisms holds potential as a general strategy for the design of ADAM inhibitors.