Respiratory syncytial virus (RSV) infection is a leading cause of severe lower respiratory tract illness in young infants, the elderly and immunocompromised individuals. We demonstrate here that the co-inhibitory molecule programmed cell death 1 (PD-1) is selectively upregulated on T cells within the respiratory tract during both murine and human RSV infection. Importantly, the interaction of PD-1 with its ligand PD-L1 is vital to restrict the pro-inflammatory activities of lung effector T cells in situ, thereby inhibiting the development of excessive pulmonary inflammation and injury during RSV infection. We further identify that PD-L1 expression on lung inflammatory dendritic cells is critical to suppress inflammatory T-cell activities, and an interferon-STAT1-IRF1 axis is responsible for increased PD-L1 expression on lung inflammatory dendritic cells. Our findings suggest a potentially critical role of PD-L1 and PD-1 interactions in the lung for controlling host inflammatory responses and disease progression in clinical RSV infection.