Chronic inflammation induced by hepatitis B virus (HBV) is a major causative factor associated with the development of cirrhosis and hepatocellular carcinoma. In this study, we investigated the roles of three inflammatory factors, IL-8, IL-29 (or IFN-λ1), and cyclooxygenase-2 (COX-2), in HBV infection. We showed that the expression of IL-29, IL-8, and COX-2 genes was enhanced in HBV-infected patients or in HBV-expressing cells. In HBV-transfected human lymphocytes and hepatocytes, IL-29 activates the production of IL-8, which in turn enhances the expression of COX-2. In addition, COX-2 decreases the production of IL-8, which in turn attenuates the expression of IL-29. Thus, we proposed that HBV infection induces a novel inflammation cytokine network involving three inflammatory factors that regulate each other in the order IL-29/IL-8/COX-2, which involves positive regulation and negative feedback. In addition, we also demonstrated that COX-2 expression activated by IL-8 was mediated through CREB and C/EBP, which maintains the inflammatory environment associated with HBV infection. Finally, we showed that the ERK and the JNK signaling pathways were cooperatively involved in the regulation of COX-2. We also demonstrated that IL-29 inhibits HBV replication and that IL-8 attenuates the expression of IL-10R2 and the anti-HBV activity of IL-29, which favors the establishment of persistent viral infection. These new findings provide insights for our understanding of the mechanism by which inflammatory factors regulate each other in response to HBV infection.