IFN-λ4 is a novel type-III interferon with strong clinical significance in humans. Only individuals who carry the Δ G allele of a genetic variant rs368234815-TT/ Δ G are genetically able to produce IFN-λ4 protein. Carriers of the Δ G allele have impaired ability to clear hepatitis C virus (HCV) infection (Prokunina-Olsson et al., 2013). At the same time, recent findings suggest that carriers of the Δ G allele are protected from mucinous type of ovarian cancer (Kelemen et al., 2015). We explored the function of IFN-λ4 in an inducible cell line HepG2- IFN-λ4 -GFP, which produces a partially secreted IFN-λ4. We observed two main phenotypes caused by IFN-λ4 expression: induction of interferon-stimulated genes (ISGs) both in the expressing and bystander cells, and increased cell death with reduced proliferation in the expressing cells. Both effects were inhibited by a blocking antibody for IFN-λ4, suggesting that they might be related and caused by secreted IFN-λ4. Our results suggest that chronic induction of IFN-λ4 in HCV-infected hepatocytes of individuals with rs368234815- Δ G allele could contribute to pre-activation of interferon signaling competing with effects of type-I interferons (IFN- α ) . IFN-λ4-induced death of hepatic cells may contribute to development of chronic hepatitis and eventual liver failure. At the same time, we suggest that the anti-proliferative effects of IFN-λ4 might be beneficial in other circumstances, and result in prevention of excessive proliferation and elimination of tumor cells. The pathogenic or beneficial effect of IFN-λ4 might depend on cell type specificity and triggers of its expression.