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Inducible Co-stimulator (ICOS) plays a critical role in mediating T cell differentiation and function and is considered a key player in balancing T effector and T regulatory (Treg) cell responses. Here we show that activation of the ICOS signalling pathway during acute influenza A virus (IAV) infection by application of an agonistic ICOS antibody reduced the frequency of CD8+ T cells in the respiratory tract of IAV infected animals and delayed pathogen elimination. In line with this, immune-mediated influenza pneumonia was significantly ameliorated in mice that received ICOS agonist as indicated by significantly reduced alveolar infiltrations and bronchointerstitial pneumonia, while at the same time virus-related pathology remained unaffected. Importantly, ICOS agonist treatment resulted in expansion of CD4+Foxp3+ Tregs in IAV infected mice, which was associated with elevated levels of the immunosuppressive cytokine IL-10 in the alveolar space. Together, our findings suggest a prominent role of ICOS signaling during acute IAV infection by increasing the Treg/CD8+ T cell ratio with beneficial outcome on immune-mediated pneumonia and underline the suitability of ICOS as potential therapeutic target for immune intervention in those infectious conditions characterized by strong immunopathology rather than virus-mediated cytopathic effects.