Recently, a relationship between receptor endocytosis and downstream signaling has been documented for several immunomodulatory molecules. However, endocytosis of interferon-lambdas (IFN-lambdas) and its impact on IFN-lambda function has not been studied. We show that IFN-lambda is internalized through a cholesterol-dependent, dynamin-independent, and Rho family of GTPase-independent pathway in HepG2 cells. Furthermore, we demonstrate that inhibition of IFN-lambda endocytosis by cholesterol depletion suppresses the activation of IFN-lambda responsive promoters. These results suggest that IFN-lambda endocytosis participates in regulating antiviral gene induction and thus may affect antiviral immunity.