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Pulmonary fibrosis is a chronic progressive lung disease with few treatments. Human mesenchymal stem cells (MSCs) have been shown to be beneficial in pulmonary fibrosis because they have immunomodulatory capacity. However, there is no reliable model to test the therapeutic effect of human MSCs in vivo. To mimic pulmonary fibrosis in humans, we established a novel bleomycin-induced pulmonary fibrosis model in humanized mice. With this model, the benefit of human MSCs in pulmonary fibrosis and the underlying mechanisms were investigated. In addition, the relevant parameters in patients with pulmonary fibrosis were examined. We demonstrate that human CD8+ T cells were critical for the induction of pulmonary fibrosis in humanized mice. Human MSCs could alleviate pulmonary fibrosis and improve lung function by suppressing bleomycin-induced human T-cell infiltration and proinflammatory cytokine production in the lungs of humanized mice. Importantly, alleviation of pulmonary fibrosis by human MSCs was mediated by the PD-1/programmed death-ligand 1 pathway. Moreover, abnormal PD-1 expression was found in circulating T cells and lung tissues of patients with pulmonary fibrosis. Our study supports the potential benefit of targeting the PD-1/programmed death-ligand 1 pathway in the treatment of pulmonary fibrosis.