Type I IFNs are unusually pleiotropic cytokines that bind to a single heterodimeric receptor and have potent antiviral, antiproliferative, and immune modulatory activities. The diverse effects of the type I IFNs are of differential therapeutic importance; in cancer therapy, an enhanced antiproliferative effect may be beneficial, whereas in the therapy of viral infections (such as hepatitis B and hepatitis C), the antiproliferative effects lead to dose limiting bone marrow suppression. Studies have shown that various members of the natural IFN-alpha family and engineered variants, such as IFN-con1, vary in the ratios between various IFN-mediated cellular activities. We used DNA shuffling to explore and confirm the hypothesis that one could simultaneously increase the antiviral and Th1-inducing activity and decrease the antiproliferative activity. We report IFN-alpha hybrids wherein the ratio of antiviral:antiproliferative and Th1-inducing: antiproliferative potencies are markedly increased with respsect to IFN-con1 (75- and 80-fold, respectively). A four-residue motif that overlaps with the IFNAR1 binding site and is derived by cross breeding with a pseudogene contributes significantly to this phenotype. These IFN-alphas have an activity profile that may result in an improved therapeutic index and, consequently, better clinical efficacy for the treatment of chronic viral diseases such as hepatitis B virus, human papilloma virus, HIV, or chronic hepatitis C.