Transgenic expression of I-E molecules prevents diabetes in NOD mice. So far, the precise role of these non-classical MHC II molecules remains elusive. Here, we showed that transgenic expression of I-E(k) alpha 16 molecule in NOD mice selectively reduced Th17 cells in the thymus and pancreatic draining lymph nodes. The reduction in Th17 cells was associated with both attenuated IL-6 production and decreased activation of macrophages. Mechanistically, transgenic expression of the I-E molecule diminished expression of intracellular classical MHC II molecule and led to impaired TLR4-mediated signaling. In contrast to classical MHC II molecule, this non-classical MHC II molecule negatively regulates the inflammatory responses of macrophages. Altogether, our study reveals a novel regulatory role of I-E molecules in modulating inflammatory immune responses.