Background Most people with COVID-19 self-manage at home. However, the condition can deteriorate quickly, and some people may develop serious hypoxia with relatively few symptoms. Early identification of deterioration allows effective management with oxygen and steroids. Telemonitoring of symptoms and physiological signs may facilitate this. Objective The aim of this study was to design, implement, and evaluate a telemonitoring system for people with COVID-19 who are self-managing at home and are considered at significant risk of deterioration. Methods A multidisciplinary team developed a telemonitoring protocol using a commercial platform to record symptoms, pulse oximetry, and temperature. If symptoms or physiological measures breached targets, patients were alerted and asked to phone for an ambulance (red alert) or for advice (amber alert). Patients attending COVID-19 assessment centers, who were considered fit for discharge but at risk of deterioration, were shown how to use a pulse oximeter and the monitoring system, which they were to use twice daily for 2 weeks. Patients could interact with the system via app, SMS, or touch-tone phone. Written guidance on alerts was also provided. Following consent, patient data on telemonitoring usage and alerts were linked to data on the use of service resources. Subsequently, patients who had either used or not used the telemonitoring service, including those who had not followed advice to seek help, agreed to brief telephone interviews to explore their views on, and how they had interacted with, the telemonitoring system. Interviews were recorded and analyzed thematically. Professionals involved in the implementation were sent an online questionnaire asking them about their perceptions of the service. Results We investigated the first 116 patients who used the service. Of these patients, 71 (61.2%) submitted data and the remainder (n=45, 38.8%) chose to self-monitor without electronic support. Of the 71 patients who submitted data, 35 (49%) received 152 alerts during their 2-week observation. A total of 67 red alerts were for oxygen saturation (SpO2) levels of ≤93%, and 15 red alerts were because patients recorded severe breathlessness. Out of 71 patients, 14 (20%) were admitted to hospital for an average stay of 3.6 (SD 4.5) days. Of the 45 who used written guidance alone, 7 (16%) were admitted to hospital for an average stay of 4.0 (SD 4.2) days and 1 (2%) died. Some patients who were advised to seek help did not do so, some because parameters improved on retesting and others because they felt no worse than before. All patients found self-monitoring to be reassuring. Of the 11 professionals who used the system, most found it to be useful and easy to use. Of these 11 professionals, 5 (45%) considered the system “very safe,” 3 (27%) thought it “could be safer,” and 3 (27%) wished to have more experience with it before deciding. In total, 2 (18%) felt that SpO2 trigger thresholds were too high. Conclusions Supported self-monitoring of patients with COVID-19 at home is reassuring to patients, is acceptable to clinicians, and can detect important signs of deterioration. Worryingly, some patients, because they felt well, occasionally ignored important signs of deterioration. It is important, therefore, to emphasize the importance of the early investigation and treatment of asymptomatic hypoxia at the time when patients are initiated and in the warning messages that are sent to patients.