The present invention relates to a novel KDI protein which is a member of the interferon family. In particular, isolated nucleic acid molecules are provided encoding a human interferon polypeptide, called "KDI". KDI polypeptides are also provided as are vectors, host cells and recombinant methods for producing the same. The invention further relates to screening methods for identifying agonists and antagonists of KDI activity. Also provided are therapeutic methods for treating immune system-related disorders.