Severe COVID-19 patients can show respiratory failure, T-cell reduction, and cytokine release syndrome (CRS), which can be fatal in both young and aged patients and is a major concern of the pandemic. However, the pathogenetic mechanisms of CRS in COVID-19 are poorly understood. Here we show single cell-level mechanisms for T-cell dysregulation in severe SARS-CoV-2 infection, and thereby demonstrate the mechanisms underlying T-cell hyperactivation and paralysis in severe COVID-19 patients. By in silico sorting CD4+ T-cells from a single cell RNA-seq dataset, we found that CD4+ T-cells were highly activated and showed unique differentiation pathways in the lung of severe COVID-19 patients. Notably, those T-cells in severe COVID-19 patients highly expressed immunoregulatory receptors and CD25, whilst repressing the expression of the transcription factor FOXP3 and interestingly, both the differentiation of regulatory T-cells (Tregs) and Th17 was inhibited. Meanwhile, highly activated CD4 + T-cells express PD-1 alongside macrophages that express PD-1 ligands in severe patients, suggesting that PD-1-mediated immunoregulation was partially operating. Furthermore, we show that CD25 + hyperactivated T-cells differentiate into multiple helper T-cell lineages, showing multifaceted effector T-cells with Th1 and Th2 characteristics. Lastly, we show that CD4 + T-cells, particularly CD25-expressing hyperactivated T-cells, produce the protease Furin, which facilitates the viral entry of SARS-CoV-2. Collectively, CD4 + T-cells from severe COVID-19 patients are hyperactivated and FOXP3-mediated negative feedback mechanisms are impaired in the lung, while activated CD4 + T-cells continue to promote further viral infection through the production of Furin.Therefore, our study proposes a new model of T-cell hyperactivation and paralysis that drives pulmonary damage, systemic CRS and organ failure in severe COVID-19 patients.