Interleukin-38 has recently been shown to have anti-inflammatory properties in lung inflammatory diseases. However, the effects of IL-38 in viral pneumonia remains unknown. In the present study, we demonstrate that circulating IL-38 concentrations together with IL-36α increased significantly in influenza and COVID-19 patients, and the level of IL-38 and IL-36α correlated negatively and positively with disease severity and inflammation, respectively. In the co-cultured human respiratory epithelial cells with macrophages to mimic lung microenvironment in vitro, IL-38 was able to alleviate inflammatory responses by inhibiting poly(I:C)-induced overproduction of pro-inflammatory cytokines and chemokines through intracellular STAT1, STAT3, p38 MAPK, ERK1/2, MEK, and NF-κB signaling pathways. Intriguingly, transcriptomic profiling revealed that IL-38 targeted genes were associated with the host innate immune response to virus. We also found that IL-38 counteracts the biological processes induced by IL-36α in the co-culture. Furthermore, the administration of recombinant IL-38 could mitigate poly I:C-induced lung injury, with reduced early accumulation of neutrophils and macrophages in bronchoalveolar lavage fluid, activation of lymphocytes, production of pro-inflammatory cytokines and chemokines and permeability of the alveolar-epithelial barrier. Taken together, our study indicates that IL-38 plays a crucial role in protection from exaggerated pulmonary inflammation during poly(I:C)-induced pneumonia, thereby providing the basis of a novel therapeutic target for respiratory viral infections.