Interferon (IFN)-λs, recently identified with a homology search, turned out to belong to a new type IFN family, type III IFN. The family includes IFN-λ1, IFN-λ2 and IFN-λ3, which are also named as interleukin (IL)-29, IL-28A and IL-28B, respectively. The expression of the IFN-λ genes is induced by various types of virus infection and double-stranded RNAs. IFN-λs, irrespective of the subtypes, bind the identical heterodimeric receptor complex that is composed of the IL-10 receptor β (IL-10Rβ) and a novel IL-28 receptor α (IL-28Rα). The ligand/receptor interactions activate the JAK/STAT signaling pathways similar to conventional type I IFNs (IFN-α and IFN-β). Although biological activities of IFN-λs overlap those of type I IFNs, IFN-λs could have distinctive and specific functions due to their particular receptor usage and limited expression of the receptor. We summarize current knowledge of the functions and discuss possible mechanisms of the actions.