Protein replacement therapy for patients with hemophilia or other inherited protein deficiencies is often complicated by pathogenic antibody responses, including antibodies that neutralize the therapeutic protein or that predispose to potentially life-threatening anaphylactic reactions by formation of IgE. Using murine and canine hemophilia as a model, we have developed a prophylactic protocol against such responses that is non-invasive and does not include immune suppression or genetic manipulation of the patient's cells. Oral delivery of a coagulation factor expressed in chloroplasts, bioencapsulated in plant cells, effectively blocked formation of inhibitory antibodies in protein replacement therapy. Inhibitor titers were mostly undetectable and up to 100-fold lower in treated subjects when compared to controls. Moreover, this treatment eliminated fatal anaphylactic reactions that occurred after four to six exposures to intravenous coagulation factor protein. Finally, the method can effectively be used to reverse or reduce undesirable pre-existing inhibitor titers.