Recently discovered type III IFNs (IFN-λ) exert their antiviral and immunomodulatory activities through a unique receptor complex composed of IFN-λR1 and interleukin-10 receptor 2. To further study type III IFNs, we cloned and characterized mouse IFN-λ ligand-receptor system. We showed that, similar to their human orthologues, mIFN-λ2 and mIFN-λ3 signal through the IFN-λ receptor complex, activate IFN stimulated gene factor 3, and are capable of inducing antiviral protection and MHC class I antigen expression in several cell types including B16 melanoma cells. We then used the murine B16 melanoma model to investigate the potential antitumor activities of IFN-λs. We developed B16 cells constitutively expressing murine IFN-λ2 (B16.IFN-λ2 cells) and evaluated their tumorigenicity in syngeneic C57BL/6 mice. Although constitutive expression of mIFN-λ2 in melanoma cells did not affect their proliferation in vitro, the growth of B16.IFN-λ2 cells, when injected s.c. into mice, was either retarded or completely prevented. We found that rejection of the modified tumor cells correlated with their level of IFN-λ2 expression. We then developed IFN-λ-resistant B16.IFN-λ2 cells (B16.IFN-λ2Res cells) and showed that their tumorigenicity was also highly impaired or completely abolished similar to B16.IFN-λ2 cells, suggesting that IFN-λs engage host mechanisms to inhibit melanoma growth. These in vivo experiments show the antitumor activities of IFN-λs and suggest their strong therapeutic potential. (Cancer Res 2006; 66(8): 4468-77)