The interferon lambda family (IFN-lambda1/2/3) is a newly described group of cytokines that are related to both the type-1 interferons and IL-10 family members. These novel cytokines are induced during viral infection and, like type-1 interferons, display significant anti-viral activity. In order to understand their function in more depth, we have examined the ability of IFN-lambda1/IL-29 to regulate cytokine production by human immune cells. Whole peripheral blood mononuclear cells (PBMC) exposed to IFN-lambda1 specifically upregulated IL-6, -8 and -10 but there were no visible effects on TNF or IL-1. This response was produced in a dose-dependant fashion and was inhibited by IL-10. Examination of purified cell populations isolated from PBMC demonstrated that monocytes, rather than lymphocytes, were the major IFN-lambda1-responsive cellular subset, producing IL-6, -8 and -10 in response to IFN-lambda1. Monocyte responses induced by low-level LPS stimulation were also synergistically enhanced by the presence of IFN-lambda1. Human macrophages were also shown to react to IFN-lambda1 similarly to monocytes, by producing the cytokines IL-6, -8 and -10. In conclusion, we have shown that IFN-lambda1, a cytokine produced in response to viral infection, activates both monocytes and macrophages producing a restricted panel of cytokines and may therefore be important in activating innate immune responses at the site of viral infection.