The present invention provides methods and materials for treating and preventing autoimmune diseases. In particular, the present invention relates to the discovery that small peptides are capable of interacting with CD40, thereby interfering with the ability of CD40 to interact with CD 154, which is important in inflammation. The present invention also relate to the use of such peptides in reducing the inflammatory response, and in particular, the autoimmune inflammatory response. The present invention also relates to the use of such short peptides to prevent or reverse autoimmune disease, and particular, diabetes, in individuals suffering from such disease. It also relates to methods and materials for detecting T-cells that express CD40 (Th40 cells). Also provided are kits for reducing inflammation, treating autoimmune diseases, or detecting Th40 cells.