Despite intensive studies during the last 3 years, the pathology and underlying molecular mechanism of coronavirus disease 2019 (COVID-19) remain poorly defined. Here, we examined postmortem COVID-19 lung tissues by spatial single-cell transcriptome analysis (SSCTA). We identified 18 major parenchymal and immune cell types, all of which are infected by SARS-CoV-2. Compared to the non-COVID-19 control, COVID-19 lungs have reduced alveolar cells (ACs), and increased innate and adaptive immune cells. Additionally, 19 differentially expressed genes in both infected and uninfected cells across the tissues mirror the altered cellular compositions. Spatial analysis of local infection rates revealed regions with high infection rates that are correlated with high cell densities (HIHD). The HIHD regions express high levels of SARS-CoV-2 entry-related factors including ACE2, FURIN, TMPRSS2, and NRP1, and co-localized with organizing pneumonia (OP) and lymphocytic and immune infiltration that have increased ACs and fibroblasts but decreased vascular endothelial cells and epithelial cells, echoing the tissue damage and wound healing processes. Sparse non-negative matrix factorization (SNMF) analysis of neighborhood cell type composition (NCTC) features identified 7 signatures that capture structure and immune niches in COVID-19 tissues. Trajectory inference based on immune niche signatures defined two pathological routes. Trajectory A progresses with primarily increased NK cells and granulocytes, likely reflecting the complication of microbial infections. Trajectory B is marked by increased HIHD and OP, possibly accounting for the increased immune infiltration. The OP regions are marked by high numbers of fibroblasts expressing extremely high levels of COL1A1 and COL1A2. Examination of single-cell RNA-seq data (scRNA-seq) from COVID-19 lung tissues and idiopathic pulmonary fibrosis (IPF) identified similar cell populations primarily consisting of myofibroblasts. Immunofluorescence staining revealed the activation of IL6-STAT3 and TGF-β-SMAD2/3 pathways in these cells, which likely mediate the upregulation of COL1A1 and COL1A2, and excessive fibrosis in the lung tissues. Together, this study provides an SSCTA atlas of cellular and molecular signatures of fatal COVID-19 lungs, revealing the complex spatial cellular heterogeneity, organization, and interactions that characterized the COVID-19 lung pathology.