To prevent multimer formation, intravenous immunoglobulin (IVIG) is often treated with traces of pepsin. So far, the mechanism behind this treatment has been unclear. Recently, we reported that human IgG4 binds other IgG molecules via Fc–Fc interactions. Here we show that IVIG treated with traces of pepsin (Nanogam) inhibits these interactions. We found that – besides IgG4 – peptides corresponding to IgG1 and IgG2 pFc’ (products of limited pepsin digestion) are responsible for the inhibitory action. Using radiolabeled pFc’, it was found that pFc’ binds directly to IgG1. Furthermore, recombinant CH3 fragments were found to also possess binding activity, and potencies of inhibition varied over 3 orders of magnitude amongst the subclasses, IgG4 being most potent. We propose that pFc’ formation explains how limited pepsin digestion diminishes adverse effects of IVIG. In particular, the presence of this fragment can enhance the stability of IgG products including IVIG and therapeutical monoclonal antibodies. Indeed, using a model system it was found that acid-induced aggregation of IgG is reduced in the presence of pFc’, suggesting a ‘chaperone-like’ activity of this fragment. Thus, pFc’ can modulate Fc interactions and may therefore reduce adverse effects of IVIG, in particular by preventing oligomerization.