Severe COVID-19 is associated with hyperinflammation and weak T cell responses against SARS-CoV-2. However, the links between those processes remain partially characterized. Moreover, whether and how therapeutically manipulating T cells may benefit patients are unknown. Our genetic and pharmacological evidence demonstrates that the ion channel TMEM176B inhibited inflammasome activation triggered by SARS-CoV-2 and SARS-CoV-2–related murine β-coronavirus. Tmem176b−/− mice infected with murine β-coronavirus developed inflammasome-dependent T cell dysfunction and critical disease, which was controlled by modulating dysfunctional T cells with PD-1 blockers. In critical COVID-19, inflammasome activation correlated with dysfunctional T cells and low monocytic TMEM176B expression, whereas PD-L1 blockade rescued T cell functionality. Here, we mechanistically link T cell dysfunction and inflammation, supporting a cancer immunotherapy to reinforce T cell immunity in critical β-coronavirus disease.