Type III interferon (IFN-λ) exhibits potent antiviral activity similar to IFN-α/β, but in contrast to the ubiquitous expression of the IFN-α/β receptor, the IFN-λ receptor is restricted to cells of epithelial origin. Despite the importance of IFN-λ in tissue-specific antiviral immunity, the molecular mechanisms responsible for this confined receptor expression remain elusive. Here, we demonstrate that the histone deacetylase (HDAC) repression machinery mediates transcriptional silencing of the unique IFN-λ receptor subunit (IFNLR1) in a cell-type-specific manner. Importantly, HDAC inhibitors elevate receptor expression and restore sensitivity to IFN-λ in previously nonresponsive cells, thereby enhancing protection against viral pathogens. In addition, blocking HDAC activity renders nonresponsive cell types susceptible to the pro-apoptotic activity of IFN-λ, revealing the combination of HDAC inhibitors and IFN-λ to be a potential antitumor strategy. These results demonstrate that the type III IFN response may be therapeutically harnessed by epigenetic rewiring of the IFN-λ receptor expression program.