Type III IFNs (IFN-λ/IL-28/29) are cytokines with type I IFN-like antiviral activities, which remain poorly characterized. We herein show that most cell types expressed both types I and III IFNs after TLR stimulation or virus infection, whereas the ability of cells to respond to IFN-λ was restricted to a narrow subset of cells, including plasmacytoid dendritic cells and epithelial cells. To examine the role of type III IFN in antiviral defense, we generated IL-28Rα-deficient mice. These mice were indistinguishable from wild-type mice with respect to clearance of a panel of different viruses, whereas mice lacking the type I IFN receptor (IFNAR−/−) were significantly impaired. However, the strong antiviral activity evoked by treatment of mice with TLR3 or TLR9 agonists was significantly reduced in both IL-28RA−/− and IFNAR−/− mice. The type I IFN receptor system has been shown to mediate positive feedback on IFN-αβ expression, and we found that the type I IFN receptor system also mediates positive feedback on IFN-λ expression, whereas IL-28Rα signaling does not provide feedback on either type I or type III IFN expression in vivo. Finally, using bone-marrow chimeric mice we showed that TLR-activated antiviral defense requires expression of IL-28Rα only on nonhemopoietic cells. In this compartment, epithelial cells responded to IFN-λ and directly restricted virus replication. Our data suggest type III IFN to target a specific subset of cells and to contribute to the antiviral response evoked by TLRs.