Dipeptidyl peptidase-4 (DPP4) modulates inflammation by enzymatic cleavage of immunoregulatory peptides and through its soluble form (sDPP4) that directly engages immune cells. Here we examine whether reduction of DPP4 activity alters inflammation. Prolonged DPP4 inhibition increases plasma levels of sDPP4, and induces sDPP4 expression in lymphocyte-enriched organs in mice. Bone marrow transplantation experiments identify hematopoietic cells as the predominant source of plasma sDPP4 following catalytic DPP4 inhibition. Surprisingly, systemic DPP4 inhibition increases plasma levels of inflammatory markers in regular chow-fed but not in high fat-fed mice. Plasma levels of sDPP4 and biomarkers of inflammation are lower in metformin-treated subjects with type 2 diabetes (T2D) and cardiovascular disease, yet exhibit considerable inter-individual variation. Sitagliptin therapy for 12 months reduces DPP4 activity yet does not increase markers of inflammation or levels of sDPP4. Collectively our findings dissociate levels of DPP4 enzyme activity, sDPP4 and biomarkers of inflammation in mice and humans.