Interferon alpha (IFN-alpha)-based therapy is the currently approved treatment for chronic hepatitis C viral infection. The sustained antiviral response rate is approximately 50% for genotype-1 infection. The major challenge to the HCV community is to improve antiviral efficacy and to reduce the side effects typically seen in IFNalpha-based therapy. One of the strategies is to identify new interferons, which may have better efficacy and less undesirable side effects. In this report, we examined the role of IL-28A (IFN lambda2), a novel type I IFN, in suppression of human hepatitis C viral RNA replication. We have cloned both the human genomic DNA and cDNA of IL-28A, and evaluated their biological activity using HCV RNA replicon cell culture system. The results show that IL-28A effectively inhibits HCV subgenomic RNA replication in a dose-dependent manner. Treatment of human hepatoma cells with IL-28A activates the JAK-STAT signaling pathway and induces the expression of some interferon-stimulated genes (ISGs), such as 6-16 and 1-8U. We also demonstrate that IL-28A induces expression of HLA class I antigens in human hepatoma cells. Moreover, IL-28A appears to specifically suppress HCV IRES-mediated translation. Although IL-28A receptor shares one subunit with the IL-10 receptor, IL-10 treatment has no detectable effect on IL-28A-induced antiviral activity. Interestingly, IL-28A can synergistically enhance IFNalpha antiviral efficacy. Our results suggest that IL-28A antiviral activity is associated with the activation of the JAK-STAT signaling pathway and expression of ISGs. The effectiveness of IL-28A antiviral activity and its synergistic effect on IFN-alpha indicate that IL-28A may be potentially used to treat HCV chronic infection.