Mesenchymal stem cells (MSC) show promising therapeutic potential, but it is unclear how they sense injury during viral lung infections. We aimed to understand how bone marrow derived-MSC (BM-MSC) can sense injury during influenza virus (IV) infection and how can they be primed to improve their protective effects. Using IV-infected alveolar epithelial cells (iAEC)/MSC co-culture systems together with our established bronchioalveolar lung organoid (BALO) model it was possible to compare the extent of epithelial cell proliferation and differentiation supported by either lung resident MSC (rMSC) or BM-MSC. Strikingly, pre-conditioning with soluble factors from iAEC or from bronchoalveolar lavage fluid significantly enhanced the capacity of BM-MSC to drive alveolarization in BALO. Although cell differentiation capacity of BALO using BM-MSC was lower than rMSC, both cell types, when in co-culture with iAEC, displayed similar protective effects. Intra-tracheal (IT) BM-MSC application in WT or IFNAR-/- mice lead to a reduction of viral load and AEC infection-associated apoptosis, while significantly improving mice survival. Bulk-RNA sequencing of flow sorted IT-delivered-BM-MSC revealed that interferon-related genes and IL-11 were upregulated in iAEC and BM-MSC. Notably, IL-11 release in BM-MSC proved to be dependent on BM-MSC activation by type I IFN signalling, with this communication significantly contributing to iAEC resilience. In summary, type I IFN/IL-11 signaling axis could represent a promising target for the development of human MSC therapies.