Antibodies play a central role in immunity by forming an interface with the innate immune system and, typically, mediate proinflammatory activity. We describe a novel posttranslational modification that leads to anti-inflammatory activity of antibodies of immunoglobulin G, isotype 4 (IgG4). IgG4 antibodies are dynamic molecules that exchange Fab arms by swapping a heavy chain and attached light chain (half-molecule) with a heavy-light chain pair from another molecule, which results in bispecific antibodies. Mutagenesis studies revealed that the third constant domain is critical for this activity. The impact of IgG4 Fab arm exchange was confirmed in vivo in a rhesus monkey model with experimental autoimmune myasthenia gravis. IgG4 Fab arm exchange is suggested to be an important biological mechanism that provides the basis for the anti-inflammatory activity attributed to IgG4 antibodies.