The cellular members of the interleukin-10 (IL-10) cytokine family share sequence homology with IL-10, whereas their sites of expression and their functions are divergent. One of these factors, AK155 or IL-26, was discovered because of its overexpression in human T lymphocytes after growth transformation by the simian rhadinovirus herpesvirus saimiri. In addition, the gene is transcribed in various types of primary and immortalized T-cells. Here we describe epithelial cells, namely colon carcinoma cells and keratinocytes, as targets of this T-cellular lymphokine. Purified recombinant IL-26 induced the rapid phosphorylation of the signal transducer and activator of transcription factors 1 and 3. As a result, secretion of IL-10 and IL-8, as well as cell surface expression of CD54 were enhanced. Moreover, we show that the IL-26 protein binds to heparin, is released from the cell surface, and can be functionally inhibited by heparin. The sensitivity to recombinant IL-26 of various cell lines strictly correlated with the expression of the long chain of the IL-20 receptor. Because blocking antibodies against either the short chain of the IL-10 receptor or the long chain of the IL-20 receptor inhibited IL-26-dependent signal transduction, and transient expression of these receptor chains induced IL-26 responsivity in non-sensitive cells, we propose that the IL-20 receptor 1 and IL-10 receptor 2 chains participate in forming the IL-26 receptor. Targeting epithelial cells, the T-cell lymphokine IL-26 is likely to play a role in local mechanisms of mucosal and cutaneous immunity.