Purpose This literature review summarizes the main immunological characteristics of type III interferons (IFN) and highlights the clinically relevant aspects and future therapeutic perspectives for these inflammatory molecules. Source Relevant articles in PubMed MEDLINE from the first publication (2003) until 2020. N=101 articles were included in this review. Principal findings Type III IFNs represent a relatively newly described inflammatory cytokine family. Although they induce substantially similar signalling to the well-known type I IFNs, significant functional differences make these molecules remarkable. Type III IFNs have extensive biological effects, contributing to the pathogenesis of several diseases and also offering new diagnostic and therapeutic approaches: 1) their potent anti-viral properties make them promising therapeutics against viral hepatitis and even against severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), which is causing the current coronavirus disease 2019 (COVID-19) pandemic; 2) imbalances in the IFN-λs contribute to several forms of chronic inflammation (e.g., systemic and organ-specific autoimmune diseases) and potentially predict disease progression and therapeutic response to biologic therapies; and 3) the antitumor properties of the type III IFNs open up new therapeutic perspectives against malignant diseases. Conclusion Over the last 18 years, researchers have gathered extensive information about the presence and role of these versatile inflammatory cytokines in human diseases, but further research is needed to clarify the mechanistic background of those observations. Better understanding of their biological activities will permit us to use type III IFNs more efficiently in new diagnostic approaches and individualized therapies, consequently improving patient care.