IFN-kappa 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-kappa on cells of the innate immune system by comparing cytokine release following treatment of human cells with either IFN-kappa or two recombinant IFN subtypes, IFN-beta and IFN-alpha2a. Although IFN-alpha2a failed to stimulate monocyte cytokine secretion, IFN-kappa, like IFN-beta, induced the release of several cytokines from both monocytes and dendritic cells, without the requirement of a costimulatory signal. IFN-kappa was particularly effective in inhibiting inducible IL-12 release from monocytes. Unlike IFN-beta, IFN-kappa did not induce release of IFN-gamma by PBL. Expression of the IFN-kappa mRNA was observed in resting dendritic cells and monocytes, and it was up-regulated by IFN-gamma stimulation in monocytes, while IFN-beta mRNA was minimally detectable under the same conditions. Monocyte and dendritic cell expression of IFN-kappa was also confirmed in vivo in chronic lesions of psoriasis vulgaris and atopic dermatitis. Finally, biosensor-based binding kinetic analysis revealed that IFN-kappa, like IFN-beta, binds strongly to heparin (K(d): 2.1 nM), suggesting that the cytokine can be retained close to the local site of production. The pattern of cytokines induced by IFN-kappa in monocytes, coupled with the unique induction of IFN-kappa mRNA by IFN-gamma, indicates a potential role for IFN-kappa in the regulation of immune cell functions.