Interleukin-10 (IL-10) is a pleiotropic cytokine produced by a wide variety of cells. It has been implicated in cancer progression, and at times, it has seemingly contradictory effects. The impact of IL-10 on immune components in the context of cancer has been intensively investigated, but its effect on cancer cells remains poorly understood. In this study, we examined the expression of IL-10 and IL-10 receptor 1 (IL-10R1) in resected locally advanced lung adenocarcinoma by immunohistochemistry. IL-10 immunoreactivity was stronger in intraepithelial regions than in stroma. The amount of IL-10 found either in intraepithelial or in stromal regions had no prognostic value, but the relative distribution of IL-10 in these two locations was related to cancer-immune phenotypes. High expression of IL-10R1 by tumor cells was significantly correlated with poor prognosis, suggesting that IL-10-mediated signaling may induce cancer cell intrinsic effects that promote cancer progression. Functional analysis using human lung adenocarcinoma cell lines revealed that IL-10 did not directly affect cell proliferation and migration. Incubation of cancer cells with IL-10 suppressed interferon-gamma (IFN-gamma)-induced STAT1 phosphorylation and inhibited the transcription of IFN-gamma-targeted genes, such as CXCL9, CXCL10, and PD-L1. IL-10 enhanced IFN-gamma-induced SOCS1 and SOCS3 expression, an effect that might be responsible for the downregulation of STAT1 activity in cancer cells. Our findings provide a rationale for targeting IL-10 on cancer cells as a potential strategy for treating cancer.