Interferon lambda (IFN-L) mediates a crucial antiviral response to protect the host cells during viral infection, as well as functioning as a potential immune modulator. In this thesis, we investigated the immune modulatory role of IFN-L in B-cells. In the first part, we established an ELISA-based in vitro assays to study IFN-L ligands and its receptor (Interferon lambda receptor 1 - IFNLR1 and IL10R2) interactions. First, we determined the receptor - ligand (IFNLR1 - IFN-L1-3) dissociation constant (KD) as a measure of the ligand and receptor binding affinity. We found that IFN-L1 showed higher binding affinity to IFNLR1 compared to IFN-L2 and IFN-L3. Further, we screened antagonistic peptides, which act to interfere in IFNLR1 - IFN-Ls interactions. The peptides are designed to compete with IFN-Ls at their IFNLR1 binding sites and this experiment thus allowed us to develop a molecular understanding of the interaction. We have also performed the small molecules screen to identify the potential substances targeting for IFN-L signaling, it will allow us the modulation of IFN-L signaling which is an interesting target for a broad range of applications. In the second part, we screened the immune cell populations to understand the direct response to IFN-L, to resolve discrepancies with previously reported data. B-cells and the subpopulations of naive, class switched and non-class switched memory B-cells were found to directly respond to IFN-Ls. On the other hand, T-cells, NK-cells and monocytes did not show any response to IFN-Ls. Since B-cells showed a response to IFN-L, we performed transcriptomic profiling of sorted B-cell, to examine the immune modulatory role of IFN-L in B-cells. On the basis of B-cell transcriptome analysis and follow up in vitro experiments, the IFN-L increases the mTORC1 (mammalian/mechanistic target of rapamycin complex 1) activity in B-cells, upon B-cell receptor (BCR) cross linking with anti-IgM. The BCR and IFN-L signaling cascade engage the mTORC1 pathway via phosphoinositide 3-kinase (PI3K). However, it needs further evaluation to see if IFN-L increase the mTORC1 activity indirectly via ISGs. IFN-L enhances the BCR-induced cell cycle progress though this mTORC1 and IFN-L alone did not induce any cell proliferation. Consequently IFN-L further boosts the differentiation of naive B-cells into plasmablasts upon BCR-activation, so the cells gain effector functions such as cytokines release (IL-6, IL-10) and antibody production (IgM). The role of IFN-L in plasmablast differentiation was previously not known. In this study, we have shown how IFN-L functionally binds to B-cells and that it systematically boosts the differentiation of naive B-cells into plasmablasts via mTORC1 and cell cycle progression in BCR-activated cells.