Interferon (IFN)-λs, members of the type III IFN group, were recently identified in several vertebrates. Although IFN-λs have the potential to be utilized as antiviral and antitumor agents in veterinary medicine, the biological properties of IFN-λs have not yet been studied in companion animals. In this study, we analyzed the expression of canine IFN-λs and their receptors, produced a recombinant canine IFN-λ1 protein, and investigated its antiviral and antiproliferative activities using a canine kidney epithelial cell line, MDCK cells. MDCK cells were found to express type III IFN molecules, IFN-λ1 and IFN-λ3, and the receptors, IFNλR1 and IL10R2. IFN-λ1 was induced faster than IFN-λ3 by stimulation with poly (I:C). His-tagged IFN-λ1 protein expressed in Escherichia coli inhibited cytolytic plaque formation by influenza A virus infection, and induced the expression of interferon-stimulated genes, Mx1 and OAS1, in MDCK cells. In addition, recombinant IFN-λ1 inhibited the proliferation of MDCK cells slightly. These effects were observed in a dose-dependent manner. These results indicate that canine IFN-λ1 has antiviral effect, and suggest the potential applicability of canine IFN-λ1 as a therapeutic agent.