Interferons (IFNs) are generally considered antiviral cytokines, yet the newly discovered IFN-λ4 is linked with the failure to clear hepatitis C virus (HCV) infection either spontaneously or in response to treatment. IFN-λ4 can be generated only by individuals who carry the IFNL4-ΔG allele (rs368234815), which is the strongest known host factor for predicting clearance of HCV. The ancestral IFNL4-ΔG allele is the major variant in Africans while the minor variant in Asians, suggesting very strong negative genetic selection for this allele-most likely driven by an infectious agent other than HCV. IFN-λ4 most closely resembles IFN-λ3, but these proteins share only 29% amino-acid identity, and, in contrast to IFN-λ3, IFN-λ4 is only weakly secreted. Nevertheless, IFN-λ4 signals through the IFN-λ receptor complex and induces expression of IFN-stimulated genes via the Janus kinase-signal transducer and activator of transcription signaling pathway. Although the IFNL4-ΔG variant is strongly associated with the failure to clear HCV infection, HCV-infected patients who carry this allele have lower baseline HCV RNA levels in the absence of treatment. Resolving the paradoxical functions of IFN-λ4, which appears to induce antiviral activity yet impair effective clearance of HCV, may yield critical new insights into the immunologic response to HCV infection and IFN biology.