Pathologic immune hyperactivation is emerging as a key feature of critical illness in COVID-19, but the mechanisms involved remain poorly understood. We carried out proteomic profiling of plasma from cross-sectional and longitudinal cohorts of hospitalized patients with COVID-19 and analyzed clinical data from our health system database of over 3,300 patients. Using a machine learning algorithm, we identified a prominent signature of neutrophil activation, including resistin, lipocalin-2, HGF, IL-8, and G-CSF, as the strongest predictors of critical illness. Neutrophil activation was present on the first day of hospitalization in patients who would only later require transfer to the intensive care unit, thus preceding the onset of critical illness and predicting increased mortality. In the health system database, early elevations in developing and mature neutrophil counts also predicted higher mortality rates. Altogether, we define an essential role for neutrophil activation in the pathogenesis of severe COVID-19 and identify molecular neutrophil markers that distinguish patients at risk of future clinical decompensation.