Alveolar type II epithelial cells (ATIIs) are one of the primary targets for influenza A pneumonia. The lack of a culture system for maintaining differentiated ATIIs hinders our understanding of pulmonary innate immunity during viral infection. We studied influenza A virus (IAV)-induced innate immune responses in differentiated primary human ATIIs and alveolar macrophages (AMs). Our results indicate that ATIIs, but not AMs, support productive IAV infection. Viral infection elicited strong inflammatory chemokine and cytokine responses in ATIIs, including secretion of IL-8, IL-6, MCP-1, RANTES, and MIP-1beta, but not TNF-alpha, whereas AMs secreted TNF-alpha as well as other cytokines in response to infection. Wild-type virus A/PR/8/34 induced a greater cytokine response than reassortant PR/8 virus, A/Phil/82, despite similar levels of replication. IAV infection increased mRNA expression of IFN genes IFN-beta, IL-29 (IFN-lambda1), and IL-28A (IFN-lambda2). The major IFN protein secreted by type II cells was IL-29 and ATIIs appear to be a major resource for production of IL-29. Administration of IL-29 and IFN-beta before infection significantly reduced the release of infectious viral particles and CXC and CC chemokines. IL-29 treatment of type II cells induced mRNA expression of antiviral genes MX1, OAS, and ISG56 but not IFN-beta. IL-29 induced a dose-dependent decrease of viral nucleoprotein and an increase of antiviral genes but not IFN-beta. These results suggest that IL-29 exerts IFN-beta-independent protection in type II cells through direct activation of antiviral genes during IAV infection.