The aim of this work was to design and utilize a bifunctional peptide inhibitor called glutamic acid decarboxylase–bifunctional peptide inhibitor to suppress the progression of type 1 diabetes in non‐obese diabetic mice. The hypothesis is that glutamic acid decarboxylase–bifunctional peptide inhibitor binds simultaneously to major histocompatibility complex‐II and intercellular adhesion molecule type 1 on antigen‐presenting cell and inhibits the immunological synapse formation during T‐cell–antigen‐presenting cell interactions. Glutamic acid decarboxylase–bifunctional peptide inhibitor was composed of a major epitope of the type 1 diabetes‐associated antigen, glutamic acid decarboxylase 65 kDa, covalently linked to a peptide derived from CD11a of lymphocyte function‐associated antigen‐1. The suppression of insulitis and type 1 diabetes was evaluated using non‐obese diabetic and non‐obese diabetic severe combined immunodeficiency mice. Glutamic acid decarboxylase–bifunctional peptide inhibitor had the capacity to suppress invasive insulitis in non‐obese diabetic mice. CD4+ T‐cells isolated from glutamic acid decarboxylase–bifunctional peptide inhibitor treated mice also suppressed insulitis and hyperglycemia when transferred with diabetogenic non‐obese diabetic spleen cells into non‐obese diabetic severe combined immunodeficiency recipients. As predicted, the glutamic acid decarboxylase–bifunctional peptide inhibitor cross‐linked a significant fraction of major histocompatibility complex class‐II molecules to intercellular adhesion molecule type 1 molecules on the surface of live antigen‐presenting cell. Intravenous injection of the glutamic acid decarboxylase–bifunctional peptide inhibitor elicited interleukin‐4‐producing T‐cells in non‐obese diabetic mice primed against the glutamic acid decarboxylase‐epitope peptide. Together, the results indicate that glutamic acid decarboxylase–bifunctional peptide inhibitor induces interleukin‐4‐producing regulatory cells but does not expand the glutamic acid decarboxylase‐specific Th2 population. Given that Th2 effector cells can cause pathology, the glutamic acid decarboxylase–bifunctional peptide inhibitor may represent a novel mechanism to induce interleukin‐4 without Th2‐associated pathology.