Significance: Inflammation is a protective response of the body’s immune system against harmful stimuli such as pathogenic microorganisms, toxins, or damaged cells. However, if excessive or prolonged, inflammation may be harmful and therefore has to be regulated. Soluble CD52 is a natural sialoglycopeptide and immune regulator that suppresses inflammatory responses. We elucidated the mechanism of this effect by showing that soluble CD52 first sequesters a mediator of inflammation called HMGB1; in turn, this promotes binding of the sialylated CD52 glycan to an inhibitory receptor, sialic acid-binding immunoglobulin-like lectin (Siglec)-10, present on activated T cells and other immune cells. This concerted antiinflammatory mechanism driven by soluble CD52 may contribute to immune-inflammatory homeostasis and underscores the therapeutic potential of soluble CD52.