Lambda-1 interferon (IFN-λ1) and cyclooxygenase-2 (COX-2) were reported to play an important role in host antiviral defense. However, the mechanism by which IFN-λ1 and COX2 are activated and modulated during viral infection remains unclear. In this study, we found that expression of both circulating IFN-λ1 and COX2-derived prostaglandin E2 (PGE2) was coordinately elevated in a cohort of influenza patients compared to healthy individuals. Expression of IFN-λ1 was blocked by a selective COX2 inhibitor during influenza A virus infection in A549 human lung epithelial cells but enhanced by overexpression of COX2, indicating that the production of IFN-λ1 is COX2 dependent. COX2 was able to increase IFN-λ1 expression by promoting NF-κB binding to the enhancer in the IFN-λ1 promoter. We found that epigenetic changes activate COX2 expression and PGE2 accumulation during viral infection. The expression of DNA methyltransferase 3a (DNMT3a) and DNMT3b, but not that of DNMT1, was downregulated following influenza A virus infection in both A549 cells and peripheral blood mononuclear cells (PBMCs). We showed that microRNA miR29 suppresses DNMT activity and thus induces expression of COX2 and PGE2. Furthermore, miR29 expression was elevated 50-fold in virally infected A549 cells and 10-fold in PBMCs from influenza patients, compared to expression after mock infection of A549 cells or in healthy individuals, respectively. Activation of the protein kinase A signaling pathway and phosphorylation of CREB1 also contributed to COX2 expression. Collectively, our work defines a novel proinflammatory cascade in the control of influenza A virus infection.