The long-term physiological consequences of respiratory viral infections, particularly in the aftermath of the COVID-19 pandemic-termed post-acute sequelae of SARS-CoV-2 (PASC)-are rapidly evolving into a major public health concern. While the cellular and molecular aetiologies of these sequelae are poorly defined, increasing evidence implicates abnormal immune responses and/or impaired organ recovery after infection. However, the precise mechanisms that link these processes in the context of PASC remain unclear. Here, with insights from three cohorts of patients with respiratory PASC, we established a mouse model of post-viral lung disease and identified an aberrant immune-epithelial progenitor niche unique to fibroproliferation in respiratory PASC. Using spatial transcriptomics and imaging, we found a central role for lung-resident CD8 T cell-macrophage interactions in impairing alveolar regeneration and driving fibrotic sequelae after acute viral pneumonia. Specifically, IFNγ and TNF derived from CD8 T cells stimulated local macrophages to chronically release IL-1β, resulting in the long-term maintenance of dysplastic epithelial progenitors and lung fibrosis. Notably, therapeutic neutralization of IFNγ + TNF or IL-1β markedly improved alveolar regeneration and pulmonary function. In contrast to other approaches, which require early intervention, we highlight therapeutic strategies to rescue fibrotic disease after the resolution of acute disease, addressing a current unmet need in the clinical management of PASC and post-viral disease.