Type I interferons (IFNs) form a network of homologous cytokines that bind to a shared, heterodimeric cell surface receptor and engage signaling pathways that activate innate and adaptive immune responses. The ability of IFNs to mediate differential responses through the same cell surface receptor has been subject of a controversial debate and has important medical implications. During the past decade, a comprehensive insight into the structure, energetics, and dynamics of IFN recognition by its two‐receptor subunits, as well as detailed correlations with their functional properties on the level of signal activation, gene expression, and biological responses were obtained. All type I IFNs bind the two‐receptor subunits at the same sites and form structurally very similar ternary complexes. Differential IFN activities were found to be determined by different lifetimes and ligand affinities toward the receptor subunits, which dictate assembly and dynamics of the signaling complex in the plasma membrane. We present a simple model, which explains differential IFN activities based on rapid endocytosis of signaling complexes and negative feedback mechanisms interfering with ternary complex assembly. More insight into signaling pathways as well as endosomal signaling and trafficking will be required for a comprehensive understanding, which will eventually lead to therapeutic applications of IFNs with increased efficacy.