Soluble interleukin-7 (IL-7) receptor α (sCD127) is implicated in the pathogenesis of autoimmune diseases. We show that serum sCD127 concentrations are increased at the onset of type 1 diabetes (T1D; n = 390) as compared with concentrations in age-matched islet autoantibody-negative first-degree relatives of patients (n = 392; P = 0.00001). sCD127 concentration in patients was influenced by islet autoantibody status (P = 0.003) and genotype of the rs6897932 single nucleotide polymorphism within the IL-7RA gene (P = 0.006). Release of sCD127 in vitro was strongly upregulated by activation of T lymphocytes and affected by exposure to cytokines. sCD127 bound IL-7 and was antagonistic to IL-7 signaling and IL-7-mediated T-cell proliferation, suggesting a regulatory feedback mechanism on T-cell expansion. Remarkably, high glucose led to a glycated form of sCD127 that was ineffective as an IL-7 antagonist. The finding of glycated sCD127 in the circulation of patients at onset of T1D suggested that physiological regulation of IL-7-mediated T-cell survival and expansion by sCD127 may be compromised in T1D. The findings indicate that genetic, immunologic, and metabolic factors contribute to a dysregulation of the IL-7/IL-7 receptor pathway in T1D and identify a novel hyperglycemia-mediated interference of immune regulatory networks.