Interferon lambda-3 (IFN lambda 3) which is also known as IL28B is a member of type III Interferons which are structurally and genetically different from type I Interferons. These Interferons induce signal transduction pathways similar to type I Interferons which results in the activation of Interferon Stimulated Genes (ISGs). This group of Interferons are tissue specific and reported to have antiviral activity. In the present communication, we report the expression of bovine IFN lambda 3 gene (coding for the mature protein) in Pichia pastoris, purification of the expressed protein and evaluation of its biological activity. About 19 kDa protein expressed by the transformed Pichia cells, secreted into the media and the protein was purified by SP-Sepharose ion exchange chromatography with NaCl stepwise gradient elution. Specificity of the protein was confirmed by Western blotting. Pichia expressed IFN lambda 3 was found to be biologically active, as it induced ISGs (Mx protein, OAS and PKR genes) in bovine PBMCs. Further it was also found to modulate Thl/Th2 cytokines expression in the stimulated bovine PBMCs.