Long COVID occurs in about 30% of all COVID-19 cases and can be characterized by a broad array of persisting symptoms.  We investigated the role of nasal epithelial cells(NECs) and innate lymphoid cells(ILCs) in mediating inflammation in the pathology of long COVID and potential treatment strategies. NECs were cultured at air-liquid-interface and were exposed to viral mimic poly(I:C) and immunomodulatory drug dexamethasone. The phenotype and function of long COVID NECs and blood ILCs was assessed and compared to healthy controls. In Long COVID, the relative gene expression of pro-inflammatory cytokines was increased at baseline and after 24-hour exposure to poly(I:C), while dexamethasone was a potent inhibitor of this inflammatory response. Increased frequencies of IFNγ-producing ILCs were found in long COVID, that in vitro produced more IFNγ after exposure to epithelium-derived IL-1𝛽 compared to healthy controls. Ex vivo, this inflammatory state resulted in a reduced barrier function and increased regeneration potential of long COVID nasal epithelium. Therefore, long COVID patients displaying increased IL-1𝛽 profiles could potentially benefit from Anakinra (anti-IL-1𝛽) treatment. While Long COVID is a heterogeneous condition that requires a precision medicine approach, this study demonstrated the potential benefit of immunomodulatory drugs for patients displaying increased local and systemic inflammatory phenotypes.