Autophagy contributes to cellular homeostasis through metabolite recycling and degradation of cytotoxic protein aggregates and damaged organelles. Although recent studies have established that the requirement for basal autophagy is largely tissue specific, the importance of autophagy for alveolar epithelial cell homeostasis remains an important knowledge gap. In the present study we generated two mouse models, with > 90% or > 50% recombination at the Atg5 locus in the distal respiratory epithelium, to assess the effect of dose-dependent decreases in autophagy on alveolar homeostasis. A 90% decrease in autophagy was well tolerated in young adult mice but resulted in alveolar septal thickening and altered lung mechanics in aged animals, consistent with accumulation of damage over time. By comparison, a 50% decrease in autophagy had no effect on alveolar structure or function throughout the murine life span, indicating that basal autophagy in this compartment exceeds that required for homeostasis. A 50% decrease in autophagy in the bronchoalveolar epithelium significantly attenuated influenza A/H3N2 viral replication, leading to improved lung structure and function and reduced morbidity and mortality after infection. The reserve of autophagic capacity in the alveolar epithelium may provide a niche for replication of influenza A virus.