The first line of defense against viral infections is mediated by interferons (IFN)s, which are produced rapidly by the infected host. Type I IFNs (IFN-alpha/beta) are known to combat viruses both directly by inhibiting viral replication in the cells and indirectly by stimulating the innate and adaptive immune responses. Recently, a novel class of cytokines was discovered and named IFN-lambda (alternatively type III IFN or interleukin-28/29 [IL- 28/29]), based on IFN-like antiviral activity and induction of typical IFN-inducible genes. Here, we review the literature on IFN-lambda and discuss the current knowledge of the functions and mechanisms of action of IFN-lambda.