Interleukin 26 (IL-26) gene has been identified in human, amphibian and teleost but not in rodents. It is well accepted that IL-26 was a crucial member of IL-10 family which acts as a pro-inflammatory cytokine in human. However, the role of IL-26 in regulating inflammation in lower vertebrates including teleost has not been defined yet. In the present study, grass carp IL-26 (gcIL-26) coding sequence was isolated and identified. Its chromosomal synteny was also analyzed, showing that gcIL-26 gene is flanked by IL-22 and IFN-γ genes with the same transcriptional orientation as seen in human, amphibian and zebrafish. Given that zebrafish and grass carp IL-26 shared relatively low amino acid identities with human IL-26, the functional roles of fish IL-26 are indispensable to be elucidated. Accordingly, recombinant gcIL-26 (rgcIL-26) was prepared by using Pichia pastoris expression system, and it was found to be partially glycosylated. Using grass carp head kidney leucocytes as cell model, rgcIL-26 displayed the bioactivity to stimulate the mRNA expression of some pro-inflammatory cytokines including IL-8, IL-1β and IL-6, while inhibit mRNA expression of an anti-inflammatory cytokine, IL-10. Moreover, rgcIL-26 also up-regulated inos expression and NO production in grass carp monocytes/macrophages, strengthening its pro-inflammatory properties in fish. Those results collectively demonstrated the functional role of IL-26 in regulating inflammatory response in fish.