The type III family of IFNs displays immunomodulatory and antiviral activity. Each member (IFN-lambda 1, -2, and -3) signals through the same heterodimeric receptor complex, which consists of the binding and signaling subunit (IL-28R alpha) plus the IL-10R beta chain. Although the receptor has a wide tissue distribution, the direct effects of IFN-lambda on various immune cell subsets have not been fully characterized. We have identified high levels of IL-28R alpha mRNA in pDC from peripheral blood and hypothesized that IFN-lambda plays an important role in pDC maturation and development. We show that stimulation of pDC with HSV or Imiquimod causes an increase in IL-28R alpha mRNA. In these cells, IFN-lambda 1 alters expression of the costimulatory molecules CD80 and ICOS-L and synergizes with IFN-alpha to up-regulate CD83. In addition, IFN-lambda 1 has a variable effect on the homing molecule expression of pDC and mDC. IFN-lambda 1-treated pDC display a marked difference in their ability to stimulate production of the signature cytokines IL-13, IFN-gamma, and IL-10 in a MLR. This work characterizes the variable effects of IFN-lambda on DC surface molecule expression and identifies a role in pDC activation and immunostimulatory potential. J. Leukoc. Biol. 86: 1359-1363; 2009.