Lung-resident (LR) mesenchymal stem and stromal cells (MSCs) are key elements of the alveolar niche and fundamental regulators of homeostasis and regeneration. We interrogated their function during virus-induced lung injury using the highly prevalent respiratory syncytial virus (RSV) which causes severe outcomes in infants. We applied complementary approaches with primary pediatric LR-MSCs and a state-of-the-art model of human RSV infection in lamb. Remarkably, RSV-infection of pediatric LR-MSCs led to a robust activation, characterized by a strong antiviral and pro-inflammatory phenotype combined with mediators related to T cell function. In line with this, following in vivo infection, RSV invades and activates LR-MSCs, resulting in the expansion of the pulmonary MSC pool. Moreover, the global transcriptional response of LR-MSCs appears to follow RSV disease, switching from an early antiviral signature to repair mechanisms including differentiation, tissue remodeling, and angiogenesis. These findings demonstrate the involvement of LR-MSCs during virus-mediated acute lung injury and may have therapeutic implications.