Excessive cytokine signaling frequently exacerbates lung tissue damage during respiratory viral infection. Type I (IFN-α and IFN-β) and III (IFN-λ) interferons are host-produced antiviral cytokines. Prolonged IFN-α and IFN-β responses can lead to harmful proinflammatory effects, whereas IFN-λ mainly signals in epithelia, thereby inducing localized antiviral immunity. In this work, we show that IFN signaling interferes with lung repair during influenza recovery in mice, with IFN-λ driving these effects most potently. IFN-induced protein p53 directly reduces epithelial proliferation and differentiation, which increases disease severity and susceptibility to bacterial superinfections. Thus, excessive or prolonged IFN production aggravates viral infection by impairing lung epithelial regeneration. Timing and duration are therefore critical parameters of endogenous IFN action and should be considered carefully for IFN therapeutic strategies against viral infections such as influenza and coronavirus disease 2019 (COVID-19).