Neutrophils have been suggested mediators of organ dysfunction in COVID-19. The current study investigated if systemic neutrophil activity, estimated by human neutrophil lipocalin (HNL) concentration in peripheral blood, is associated with acute kidney injury (AKI) development. A total of 103 adult patients admitted to intensive care, with PCR-confirmed SARS -CoV-2 infection, were prospectively included (Clinical Trials ID: NCT04316884). HNL was analyzed in plasma (P-HNL Dimer) and in whole blood (B-HNL). The latter after ex vivo activation with N-formyl-methionine-leucine-phenylalanine. All patients developed respiratory dysfunction and 62 (60%) were treated with invasive ventilation. Sixty-seven patients (65%) developed AKI, 18 (17%) progressed to AKI stage 3, and 14 (14%) were treated with continuous renal replacement therapy (CRRT). P-HNL Dimer was higher in patients with invasive ventilation, vasopressors, AKI, AKI stage 3, dialysis, and 30-day mortality (p < 0.001–0.046). B-HNL performed similarly with the exception of mild AKI and mortality (p < 0.001–0.004). The cohort was dichotomized by ROC estimated cutoff concentrations of 13.2 µg/L and 190 µg/L for P-HNL Dimer and B-HNL respectively. Increased cumulative risks for AKI, AKI stage 3, and death were observed if above the P-HNL cutoff and for AKI stage 3 if above the B-HNL cutoff. The relative risk of developing AKI stage 3 was nine and 39 times greater if above the cutoffs in plasma and whole blood, respectively, for CRRT eight times greater for both. In conclusion, systemically elevated neutrophil lipocalin, interpreted as increased neutrophil activity, was shown to be associated with an increased risk of severe AKI, renal replacement therapy, and mortality in COVID-19 patients with respiratory failure.