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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-α/β) 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-λ (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-λ and discuss the current knowledge of the functions and mechanisms of action of IFN-λ.