Background Coronavirus-associated acute respiratory distress syndrome (CARDS) has limited effective therapy to date. NLRP3 inflammasome activation induced by SARS-CoV-2 in COVID-19 contributes to cytokine storm. Methods This randomised, multinational study enrolled hospitalised patients (18–80 years) with COVID-19-associated pneumonia and impaired respiratory function. Eligible patients were randomised (1:1) via Interactive Response Technology to DFV890 + standard-of-care (SoC) or SoC alone for 14 days. Primary endpoint was APACHE II score at Day 14 or on day-of-discharge (whichever-came-first) with worst-case imputation for death. Other key assessments included clinical status, CRP levels, SARS-CoV-2 detection, other inflammatory markers, in-hospital outcomes, and safety. Findings Between May 27, 2020 and December 24, 2020, 143 patients (31 clinical sites, 12 countries) were randomly assigned to DFV890 + SoC ( n = 71) or SoC alone ( n = 72). Primary endpoint to establish clinical efficacy of DFV890 vs. SoC, based on combined APACHE II score, was not met; LSM (SE), 8·7 (1.06) vs. 8·6 (1.05); p = 0.467. More patients treated with DFV890 vs. SoC showed ≥ 1-level improvement in clinical status (84.3% vs. 73.6% at Day 14), earlier clearance of SARS-CoV-2 (76.4% vs. 57.4% at Day 7), and mechanical ventilation-free survival (85.7% vs. 80.6% through Day 28), and there were fewer fatal events in DFV890 group (8.6% vs. 11.1% through Day 28). DFV890 was well tolerated with no unexpected safety signals. Interpretation DFV890 did not meet statistical significance for superiority vs. SoC in primary endpoint of combined APACHE II score at Day 14. However, early SARS-CoV-2 clearance, improved clinical status and in-hospital outcomes, and fewer fatal events occurred with DFV890 vs. SoC, and it may be considered as a protective therapy for CARDS. Trial registration ClinicalTrials.gov, NCT04382053. Supplementary Information The online version contains supplementary material available at 10.1007/s15010-022-01904-w.