SARS-CoV-2 causes acute respiratory distress that can progress to multiorgan failure and death in a minority of patients. Although severe COVID-19 disease is linked to exuberant inflammation, how SARS-CoV-2 triggers inflammation is not understood. Monocytes and macrophages are sentinel immune cells in the blood and tissue, respectively, that sense invasive infection to form inflammasomes that activate caspase-1 and gasdermin D (GSDMD) pores, leading to inflammatory death (pyroptosis) and processing and release of IL-1 family cytokines, potent inflammatory mediators. Here we show that expression quantitative trait loci (eQTLs) linked to higher GSDMD expression increase the risk of severe COVID-19 disease (odds ratio, 1.3, p<0.005). We find that about 10% of blood monocytes in COVID-19 patients are infected with SARS-CoV-2. Monocyte infection depends on viral antibody opsonization and uptake of opsonized virus by the Fc receptor CD16. After uptake, SARS-CoV-2 begins to replicate in monocytes, as evidenced by detection of double-stranded RNA and subgenomic RNA and expression of a fluorescent reporter gene. However, infection is aborted, and infectious virus is not detected in infected monocyte supernatants or patient plasma. Instead, infected cells undergo inflammatory cell death (pyroptosis) mediated by activation of the NLRP3 and AIM2 inflammasomes, caspase-1 and GSDMD. Moreover, tissue-resident macrophages, but not infected epithelial cells, from COVID-19 lung autopsy specimens showed evidence of inflammasome activation. These findings taken together suggest that antibody-mediated SARS-CoV-2 infection of monocytes/macrophages triggers inflammatory cell death that aborts production of infectious virus but causes systemic inflammation that contributes to severe COVID-19 disease pathogenesis.