Severe COVID-19 patients show various immunological abnormalities including T-cell reduction and cytokine release syndrome, which can be fatal and is a major concern of the pandemic. However, it is poorly understood how T-cell dysregulation can contribute to the pathogenesis of severe COVID-19. Here we show single cell-level mechanisms for T-cell dysregulation in severe COVID-19, demonstrating new pathogenetic mechanisms of T-cell activation and differentiation underlying severe COVID-19. By in silico sorting CD4+ T-cells from a single cell RNA-seq dataset, we found that CD4+ T-cells were highly activated and showed unique differentiation pathways in the lung of severe COVID-19 patients. Notably, those T-cells in severe COVID-19 patients highly expressed immunoregulatory receptors and CD25, whilst repressing the expression of FOXP3. Furthermore, we show that CD25⁺ hyperactivated T-cells differentiate into multiple helper T-cell lineages, showing multifaceted effector T-cells with Th1 and Th2 characteristics. Lastly, we show that CD25-expressing hyperactivated T-cells produce the protease Furin, which facilitates the viral entry of SARS-CoV-2. Collectively, CD4⁺ T-cells from severe COVID-19 patients are hyperactivated and FOXP3-mediated negative feedback mechanisms are impaired in the lung, which may promote immunopathology. Therefore, our study proposes a new model of T-cell hyperactivation and paralysis that drives immunopathology in severe COVID-19.