The functional role of IL-1 family member 10, recently renamed IL-38, remains unknown. In the present study we aimed to elucidate the biological function of IL-38 and to identify its receptor. Heat-killed Candida albicans was used to stimulate memory T-lymphocyte cytokine production in freshly obtained human peripheral blood mononuclear cells from healthy subjects. The addition of recombinant IL-38 (152 amino acids) inhibited the production of T-cell cytokines IL-22 (37% decrease) and IL-17 (39% decrease). The reduction in IL-22 and IL-17 caused by IL-38 was similar to that caused by the naturally occurring IL-36 receptor antagonist (IL-36Ra) in the same peripheral blood mononuclear cells cultures. IL-8 production induced by IL-36γ was reduced by IL-38 (42% decrease) and also was reduced by IL-36Ra (73% decrease). When human blood monocyte-derived dendritic cells were used, IL-38 as well as IL-36Ra increased LPS-induced IL-6 by twofold. We screened immobilized extracellular domains of each member of the IL-1 receptor family, including the IL-36 receptor (also known as "IL-1 receptor-related protein 2") and observed that IL-38 bound only to the IL-36 receptor, as did IL-36Ra. The dose-response suppression of IL-38 as well as that of IL-36Ra of Candida-induced IL-22 and IL-17 was not that of the classic IL-1 receptor antagonist (anakinra), because low concentrations were optimal for inhibiting IL-22 production, whereas higher concentrations modestly increased IL-22. These data provide evidence that IL-38 binds to the IL-36R, as does IL-36Ra, and that IL-38 and IL-36Ra have similar biological effects on immune cells by engaging the IL-36 receptor.