SARS-CoV-2 infection triggers expression of endogenous retroviruses (ERVs), but whether this persists during COVID-19 and contributes to disease severity has not been well characterized. In this study, we analyzed bulk and single-cell RNA-sequencing datasets from multiple cohorts of severe COVID-19 patients to investigate the role of ERVs in COVID-19 immunopathology. We identified 33 differentially expressed proviral ERV loci in severe COVID-19 compared with healthy individuals (“severe COVID-19 signature ERVs”). ERV activation was associated with dysregulation of ERV epigenetic regulators, and their expression strongly correlated with key inflammatory pathways implicated in severe COVID-19, including neutrophil degranulation, interleukin signaling, and inflammasome activation. Anakinra treatment reversed activation of signature ERVs. Six signature ERVs were specific to intensive care unit (ICU) admission and significantly correlated with hospital-free days at day 45 (HFD-45). At the single-cell level, signature ERVs were significantly upregulated in erythroid-like and erythroid precursor cells and macrophages of patients with severe disease. Within these cells, we found evidence of ERV-associated differences in inflammatory gene expression, whereby cells expressing signature ERVs showed heightened expression of innate immune genes compared with cells not expressing these ERVs. Together, our study unmasked specific ERV loci activated in severe COVID-19 that are linked to immunopathology. ### Competing Interest Statement The authors have declared no competing interest. Canadian Institutes of Health Research, https://ror.org/01gavpb45, PJT 183573, ECP184181 Michael Smith Health Research BC, https://ror.org/020x39229, SCH-2022-2804