Severe respiratory infections can result in acute respiratory distress syndrome (ARDS)1. There are no effective pharmacological therapies that have been shown to improve outcomes for patients with ARDS. Although the host inflammatory response limits spread of and eventually clears the pathogen, immunopathology is a major contributor to tissue damage and ARDS1,2. Here we demonstrate that respiratory viral infection induces distinct fibroblast activation states, which we term extracellular matrix (ECM)-synthesizing, damage-responsive and interferon-responsive states. We provide evidence that excess activity of damage-responsive lung fibroblasts drives lethal immunopathology during severe influenza virus infection. By producing ECM-remodelling enzymes—in particular the ECM protease ADAMTS4—and inflammatory cytokines, damage-responsive fibroblasts modify the lung microenvironment to promote robust immune cell infiltration at the expense of lung function. In three cohorts of human participants, the levels of ADAMTS4 in the lower respiratory tract were associated with the severity of infection with seasonal or avian influenza virus. A therapeutic agent that targets the ECM protease activity of damage-responsive lung fibroblasts could provide a promising approach to preserving lung function and improving clinical outcomes following severe respiratory infections.