Interferons induced early after SARS-CoV-2 infection are crucial for shaping immunity and preventing severe COVID-19. We previously demonstrated that injection of pegylated interferon-lambda accelerated viral clearance in COVID-19 patients (NCT04354259). To determine if the viral decline is mediated by enhanced immunity, we assess in vivo responses to interferon-lambda by single cell RNA sequencing and measure SARS-CoV-2-specific T cell and antibody responses between placebo and interferon-lambda-treated patients. Here we show that interferon-lambda treatment induces interferon stimulated genes in peripheral immune cells expressing IFNLR1, including plasmacytoid dendritic cells and B cells. Interferon-lambda does not affect SARS-CoV-2-specific antibody levels or the magnitude of virus-specific T cells. However, we identify delayed T cell responses in older adults, suggesting that interferon-lambda can overcome delays in adaptive immunity to accelerate viral clearance in high-risk patients. Altogether, interferon-lambda offers an early COVID-19 treatment option for outpatients to boost innate antiviral defenses without dampening peripheral adaptive immunity.