In order to maintain the gas exchange function of the lung following influenza virus infection, a delicate orchestration of positive and negative regulatory pathways must be maintained to attain viral eradication while minimizing local inflammation. The programmed death receptor 1-ligand/programmed death receptor-1 (PDL-1/PD-1) pathway plays an important immunoregulatory role particularly in the context of T cell function. Here, we show that influenza virus infection of primary airway epithelial cells strongly enhances PDL-1 expression, and does so in an interferon-α receptor (IFNAR) signaling dependent manner. PD-1 is primarily expressed on effector T cells in the lung compared to effector memory and central memory cells, and shortly after influenza virus infection an increased number of PD-1⁺ T cells are recruited to the airways. Using in vitro co-cultures of airway epithelial cells and T cells, and in vivo models of influenza virus infection, we demonstrate that blockade of airway epithelial PDL-1 improves CD8 T cell function defined by increased production of IFNγ, granzyme B, and expression of CD107ab. Furthermore, PDL-1 blockade in the airways served to accelerate influenza virus clearance and enhance infection recovery. Our findings suggest that local manipulation of the PDL-1/PD-1 axis in the airways may represent a therapeutic alternative during acute influenza virus infection.