Background. Nonalcoholic fatty liver disease (NAFLD) is the most common liver disease associated with systemic changes in immune response, which might be associated with coronavirus disease 2019 (COVID-19) severity. The aim of this study was to investigate the impact of NAFLD on COVID-19 severity and outcomes. Methods. A prospective observational study included consecutively hospitalized adult patients, hospitalized between March and June 2021, with severe COVID-19. Patients were screened for fatty liver by ultrasound and subsequently diagnosed with NAFLD. Patients were daily followed until discharge, and demographic, clinical, and laboratory data were collected and correlated to clinical outcomes. Results. Of the 216 patients included, 120 (55.5%) had NAFLD. The NAFLD group had higher C-reactive protein (interquartile range [IQR]) (84.7 [38.6–129.8] mg/L vs 66.9 [32.2–97.3] mg/L; P = .0340), interleukin-6 (49.19 [22.66–92.04] ng/L vs 13.22 [5.29–39.75] ng/L; P < .0001), aspartate aminotransferase (58 [40–81] IU/L vs 46 [29–82] IU/L; P = .0123), alanine aminotransferase (51 [32–73] IU/L vs 40 [23–69] IU/L; P = .0345), and lactate dehydrogenase (391 [285–483] IU/L vs 324 [247–411] IU/L; P = .0027). The patients with NAFLD had higher disease severity assessed by 7-category ordinal scale, more frequently required high-flow nasal cannula or noninvasive ventilation (26, 21.66%, vs 10, 10.42%; P = .0289), had longer duration of hospitalization (IQR) (10 [8–15] days vs 9 [6–12] days; P = .0018), and more frequently had pulmonary thromboembolism (26.66% vs 13.54%; P = .0191). On multivariable analyses, NAFLD was negatively associated with time to recovery (hazard ratio, 0.64; 95% CI, 0.48 to 0.86) and was identified as a risk factor for pulmonary thrombosis (odds ratio, 2.15; 95% CI, 1.04 to 4.46). Conclusions. NAFLD is associated with higher COVID-19 severity, more adverse outcomes, and more frequent pulmonary thrombosis