SARS coronavirus 2 (SARS-CoV-2) is a novel viral pathogen that causes a clinical disease called coronavirus disease 2019 (COVID-19). Although most COVID-19 cases are asymptomatic or involve mild upper respiratory tract symptoms, a significant number of patients develop severe or critical disease. Patients with severe COVID-19 commonly present with viral pneumonia that may progress to life-threatening acute respiratory distress syndrome (ARDS). Patients with COVID-19 are also predisposed to venous and arterial thromboses that are associated with a poorer prognosis. The present study identified the emergence of a low-density inflammatory neutrophil (LDN) population expressing intermediate levels of CD16 (CD16 Int) in patients with COVID-19. These cells demonstrated proinflammatory gene signatures, activated platelets, spontaneously formed neutrophil extracellular traps, and enhanced phagocytic capacity and cytokine production. Strikingly, CD16 Int neutrophils were also the major immune cells within the bronchoalveolar lavage fluid, exhibiting increased CXCR3 but loss of CD44 and CD38 expression. The percentage of circulating CD16 Int LDNs was associated with D-dimer, ferritin, and systemic IL-6 and TNF-α levels and changed over time with altered disease status. Our data suggest that the CD16 Int LDN subset contributes to COVID-19–associated coagulopathy, systemic inflammation, and ARDS. The frequency of that LDN subset in the circulation could serve as an adjunct clinical marker to monitor disease status and progression.