Virus and host factors contribute to cell-to-cell variation in viral infections and determine the outcome of the overall infection. However, the extent of the variability at the single-cell level and how it impacts virus-host interactions at a system level are not well understood. To characterize the dynamics of viral transcription and host responses, we used single-cell RNA sequencing to quantify at multiple time points the host and viral transcriptomes of human A549 cells and primary bronchial epithelial cells infected with influenza A virus. We observed substantial variability in viral transcription between cells, including the accumulation of defective viral genomes (DVGs) that impact viral replication. We show (i) a correlation between DVGs and virus-induced variation of the host transcriptional program and (ii) an association between differential inductions of innate immune response genes and attenuated viral transcription in subpopulations of cells. These observations at the single-cell level improve our understanding of the complex virus-host interplay during influenza virus infection.IMPORTANCE Defective influenza virus particles generated during viral replication carry incomplete viral genomes and can interfere with the replication of competent viruses. These defective genomes are thought to modulate the disease severity and pathogenicity of an influenza virus infection. Different defective viral genomes also introduce another source of variation across a heterogeneous cell population. Evaluating the impact of defective virus genomes on host cell responses cannot be fully resolved at the population level, requiring single-cell transcriptional profiling. Here, we characterized virus and host transcriptomes in individual influenza virus-infected cells, including those of defective viruses that arise during influenza A virus infection. We established an association between defective virus transcription and host responses and validated interfering and immunostimulatory functions of identified dominant defective viral genome species in vitro This study demonstrates the intricate effects of defective viral genomes on host transcriptional responses and highlights the importance of capturing host-virus interactions at the single-cell level. Keywords: defective viral genome; host immune response; influenza A virus; single-cell RNA-seq; viral transcription.