Recombinant DNA encoding Tumor Necrosis Factor (TNF) Inhibitory Protein, or an active fragment thereof, is obtained. The TNF Inhibitory Protein has the ability to inhibit: (a) the binding of TNF to its receptors, and (b) the cytotoxic effect of TNF. TNF Inhibitory Protein and salts, functional derivatives and active fractions thereof can be used to antagonize the deleterious effects of TNF by eliminating TNF from the body, and to reduce the cytotoxic activity of TNF by binding to TNF and thereby to inhibit the binding of TNF to its receptors. The DNA may be in an expression vector. Host cells transfected with such an expression vector may be used to produce the TNF Inhibitory Protein.