COVID-19 remains a global pandemic of an unprecedented magnitude with millions of people now developing “COVID lung fibrosis.” Single-cell transcriptomics of lungs of patients with long COVID revealed a unique immune signature demonstrating the upregulation of key proinflammatory and innate immune effector genes CD47, IL-6, and JUN. We modeled the transition to lung fibrosis after COVID and profiled the immune response with single-cell mass cytometry in JUN mice. These studies revealed that COVID mediated chronic immune activation reminiscent to long COVID in humans. It was characterized by increased CD47, IL-6, and phospho-JUN (pJUN) expression which correlated with disease severity and pathogenic fibroblast populations. When we subsequently treated a humanized COVID lung fibrosis model by combined blockade of inflammation and fibrosis, we not only ameliorated fibrosis but also restored innate immune equilibrium indicating possible implications for clinical management of COVID lung fibrosis in patients.