Increased levels of interferon-γ (IFN-γ) are routinely observed in the respiratory tract following influenza virus infection, yet its potential role remains unclear. We now demonstrate that influenza-induced IFN-γ restricts protective innate lymphoid cell group II (ILC2) function in the lung following challenge with the pandemic H1N1 A/CA/04/2009 (CA04) influenza virus. Specifically, IFN-γ deficiency resulted in enhanced ILC2 activity, characterized by increased production of interleukin (IL)-5 and amphiregulin, and improved tissue integrity, yet no change in ILC2 numbers, viral load or clearance. We further found that IFN-γ-deficient mice, as well as wild-type animals treated with neutralizing anti-IFN-γ antibody, exhibited decreased susceptibility to lethal infection with H1N1 CA04 influenza virus, and moreover that survival was dependent on the presence of IL-5. The beneficial effects of IFN-γ neutralization were not observed in ILC2-deficient animals. These data support the novel concept that IFN-γ can have a detrimental role in the pathogenesis of influenza through a restriction in ILC2 activity. Thus, regulation of ILC2 activity is a potential target for post-infection therapy of influenza.