Type III interferons (IFNs), a new type IFN family consisting of 3 IFN-lambdas, have been identified through a homology search. They include IFN-lambda1, IFN-lambda2 and IFN-lambda3, which are also named as interleukin (IL)-29, IL-28A and IL-28B, respectively. The receptor complex of IFN-lambdas is composed of the IL-10 receptor beta (IL-10Rbeta) and a novel IL-28 receptor alpha (IL-28Ralpha). The signal transductions of type III IFNs seem to be similar to those of type I IFNs. Both type I and III IFNs activate Janus activated kinase (JAK)/signal transducer and activator of transcription (STAT) signaling pathway and transcribe a number of IFN-associated genes. Various types of viruses induce expressions of type III IFNs as well as type I IFNs; however, the biological functions of type III IFNs could be distinct from those of type I IFNs partly because of the tissue-restricted expression of the type III receptor complexes. In this review, we encapsulate recent understandings about type III IFNs in particular the anti-tumor effects, and discuss possible mechanisms and a potential use for cancer therapy.