IFN-κ is a recently identified type I IFN that exhibits both structural and functional homology with the other type I IFN subclasses. In this study, we have investigated the effect of IFN-κ on cells of the innate immune system by comparing cytokine release following treatment of human cells with either IFN-κ or two recombinant IFN subtypes, IFN-β and IFN-α2a. Although IFN-α2a failed to stimulate monocyte cytokine secretion, IFN-κ, like IFN-β, induced the release of several cytokines from both monocytes and dendritic cells, without the requirement of a costimulatory signal. IFN-κ was particularly effective in inhibiting inducible IL-12 release from monocytes. Unlike IFN-β, IFN-κ did not induce release of IFN-γ by PBL. Expression of the IFN-κ mRNA was observed in resting dendritic cells and monocytes, and it was up-regulated by IFN-γ stimulation in monocytes, while IFN-β mRNA was minimally detectable under the same conditions. Monocyte and dendritic cell expression of IFN-κ was also confirmed in vivo in chronic lesions of psoriasis vulgaris and atopic dermatitis. Finally, biosensor-based binding kinetic analysis revealed that IFN-κ, like IFN-β, binds strongly to heparin (Kd: 2.1 nM), suggesting that the cytokine can be retained close to the local site of production. The pattern of cytokines induced by IFN-κ in monocytes, coupled with the unique induction of IFN-κ mRNA by IFN-γ, indicates a potential role for IFN-κ in the regulation of immune cell functions.