Despite anti-TNF therapy advancements for inflammatory diseases such as rheumatoid arthritis, the burden of diseases remains high. An 11-mer TNF peptide, TNF70–80, is known to stimulate selective functional responses compared to the parent TNF molecule. Here, we show that TNF70–80 binds to the TNF receptor, activating p38 MAP kinase through TNF receptor-associated factor 2. Using truncated TNFR mutants, we identify the sequence in TNFRI which enables p38 activation by TNF70–80. Peptides with this TNFRI sequence, such as TNFRI206–211 bind to TNF and inhibit TNF-induced p38 activation, respiratory burst, cytokine production and adhesion receptor expression but not F-Met-Leu-Phe-induced respiratory burst in neutrophils. TNFRI206–211 does not prevent TNF binding to TNFRI or TNF-induced stimulation of ERK, JNK and NF-κB. TNFRI206–211 inhibits bacterial lipopolysaccharide-induced peritonitis, carrageenan-induced and antigen-induced paw inflammation, and respiratory syncytial virus-induced lung inflammation in mice. Our findings suggest a way of targeting TNF-p38 pathway to treat chronic inflammatory disorders.