Spin transfer in deep-inelastic Λ electroproduction has been studied with the HERMES detector using the 27.6 GeV polarized positron beam in the DESY HERA storage ring. For an average fractional energy transfer 〈z〉 = 0.45, the longitudinal spin transfer from the virtual photon to the Λ has been extracted. The spin transfer along the Λ momentum direction is found to be 0.11±0.17(stat)±0.03(syst); similar values are found for other possible choices for the longitudinal spin direction of the Λ. This result is the most precise value obtained to date from deep-inelastic scattering with charged lepton beams, and is sensitive to polarized up quark fragmentation to hyperon states. The experimental result is found to be in general agreement with various models of the Λ spin content, and is consistent with the assumption of helicity conservation in the fragmentation process.