IL-1 is a major proinflammatory cytokine which interacts with the IL-1 receptor I (IL-1RI) complex, composed of IL-1RI and IL-1R accessory protein subunits. Currently available strategies to counter pathological IL-1 signaling rely on a recombinant IL-1 receptor antagonist, which directly competes with IL-1 for its binding site. Presently, there are no small antagonists of the IL-1RI complex. Given this void, we derived 15 peptides from loops of IL-1R accessory protein, which are putative interactive sites with the IL-1RI subunit. In this study, we substantiate the merits of one of these peptides, rytvela (we termed “101.10”), as an inhibitor of IL-1R and describe its properties consistent with those of an allosteric negative modulator. 101.10 (IC50 ≈ 1 nM) blocked human thymocyte proliferation in vitro, and demonstrated robust in vivo effects in models of hyperthermia and inflammatory bowel disease as well as topically in contact dermatitis, superior to corticosteroids and IL-1ra; 101.10 did not bind to IL-1RI deficient cells and was ineffective in vivo in IL-1RI knockout mice. Importantly, characterization of 101.10, revealed noncompetitive antagonist actions and functional selectivity by blocking certain IL-1R pathways while not affecting others. Findings describe the discovery of a potent and specific small (peptide) antagonist of IL-1RI, with properties in line with an allosteric negative modulator.