We examined the gene expression and regulation of type III human interferon (IFN), IFN-lambda, in human neuronal cells. Human neuronal cells expressed endogenous IFN-lambda1 but not IFN-lambda2/3. Upon the activation of Toll-like receptor (TLR)-3 expressed in the neuronal cells by polyriboinosinic polyribocytidylic acid (PolyI:C), both IFN-lambda1 and IFN-lambda2/3 expression was significantly induced. The activation of TLR-3 also exhibited antiviral activity against pseudotyped human immunodeficiency virus (HIV)-1 infection of the neuronal cells. Human neuronal cells also expressed functional IFN-lambda receptor complex, interleukin-28 receptor alpha subunit (IL-28Ralpha) and IL-10Rbeta, as evidenced by the observations that exogenous IFN-lambda treatment inhibited pseudotyped HIV-1 infection of the neuronal cells and induced the expression of apolipoprotein B mRNA-editing enzyme, catalytic polypeptide-like (APOBEC)3G/3F, the newly identified anti-HIV-1 cellular factors. These data provide direct and compelling evidence that there is intracellular expression and regulation of IFN-lambda in human neuronal cells, which may have an important role in the innate neuronal protection against viral infections in the CNS.