Respiratory Syncytial Virus (RSV) infects respiratory epithelial cells and deregulates host gene expression by many mechanisms including expression of RSV G protein (RSV G). RSV G protein encodes a central conserved region (CCR) containing a CX3C motif that functions as a fractalkine mimic. Disruption of the CX3C motif (a.a. 182–186) located in the CCR of the G protein has been shown to affect G protein function in vitro and the severity of RSV disease pathogenesis in vivo. We show that infection of polarized Calu3 respiratory cells with recombinant RSV having point mutations in Cys173 and 176 (C173/176S) (rA2-GC12), or Cys186 (C186S) (rA2-GC4) is associated with a decline in the integrity of polarized Calu-3 cultures and decreased virus production. This is accompanied with downregulation of miRNAs let-7f and miR-24 and upregulation of interferon lambda (IFNλ), a primary antiviral cytokine for RSV in rA2-GC12/rA2-GC4 infected cells. These results suggest that residues in the cysteine noose region of RSV G protein can modulate IFN λ expression accompanied by downregulation of miRNAs, and are important for RSV G protein function and targeting.