Since the beginning of the SARS‐CoV‐2 pandemic in 2020, researchers worldwide have made efforts to understand the mechanisms behind the varying range of COVID‐19 disease severity. Since the respiratory tract is the site of infection, and immune cells differ depending on their anatomical location, studying blood is not sufficient to understand the full immunopathogenesis in patients with COVID‐19. It is becoming increasingly clear that monocytes, dendritic cells (DCs), and monocytic myeloid‐derived suppressor cells (M‐MDSCs) are involved in the immunopathology of COVID‐19 and may play important roles in determining disease severity. Patients with mild COVID‐19 display an early antiviral (interferon) response in the nasopharynx, expansion of activated intermediate monocytes, and low levels of M‐MDSCs in blood. In contrast, patients with severe COVID‐19 seem to lack an early efficient induction of interferons, and skew towards a more suppressive response in blood. This is characterized by downregulation of activation markers and decreased functional capacity of blood monocytes and DCs, reduced circulating DCs, and increased levels of HLA‐DR
lo
CD14
+
M‐MDSCs. These suppressive characteristics could potentially contribute to delayed T‐cell responses in severe COVID‐19 cases. In contrast, airways of patients with severe COVID‐19 display hyperinflammation with elevated levels of inflammatory monocytes and monocyte‐derived macrophages, and reduced levels of tissue‐resident alveolar macrophages. These monocyte‐derived cells contribute to excess inflammation by producing cytokines and chemokines. Here, we review the current knowledge on the role of monocytes, DCs, and M‐MDSCs in COVID‐19 and how alterations and the anatomical distribution of these cell populations may relate to disease severity.