Although most SARS-CoV-2-infected individuals experience mild coronavirus disease 2019 (COVID-19), some patients suffer from severe COVID-19, which is accompanied by acute respiratory distress syndrome and systemic inflammation. To identify factors driving severe progression of COVID-19, we performed single-cell RNA-seq using peripheral blood mononuclear cells (PBMCs) obtained from healthy donors, patients with mild or severe COVID-19, and patients with severe influenza. Patients with COVID-19 exhibited hyper-inflammatory signatures across all types of cells among PBMCs, particularly up-regulation of the TNF/IL-1 beta-driven inflammatory response as compared to severe influenza. In classical monocytes from patients with severe COVID-19, type I IFN response co-existed with the TNF/IL-1 beta-driven inflammation, and this was not seen in patients with milder COVID-19. Interestingly, we documented type I IFN-driven inflammatory features in patients with severe influenza as well. Based on this, we propose that the type I IFN response plays a pivotal role in exacerbating inflammation in severe COVID-19.