Lambda provides 512 MB of space . You can use this mount point to store downloaded S3 files or to create new ones. /tmp
s3client.download_file(bucket_name, obj.key, '/tmp/'+filename)
...
blank_file = open('/tmp/blank_file.txt', 'w')
The working directory used by Lambda, /var/taskand this is a read-only file system. You cannot create files in it.