Lambda interferons (IFNλs), also termed type III interferons (IFNs) or interleukins-28/29, have been in the shadow of type I IFNs for a long time. Their common induction mechanisms and signalling cascades with type I IFNs have made difficult the unwinding of their unique nonredundant functions. However, this is now changing with mounting evidence supporting a major role of IFNλs as a specialized antiviral defense system in the body, mediating protection at mucosal barrier surfaces while limiting immunopathology. Here, we review the latest progress on the complex activities of IFNλs in the respiratory tract, focusing on their multiple effects in IFNλ receptor-expressing cells, the modulation of innate and adaptive immune responses in the context of infections and respiratory diseases, and their similarities and differences with type I IFNs. We also discuss their potential in therapeutic applications and the most recent developments in that direction.