An expanded myeloid cell compartment is a hallmark of severe coronavirus disease 2019 (COVID-19); however, it remains unclear whether myeloid cells are beneficial or detrimental to the clinical outcome. Here, we tracked cellular dynamics of myeloid-derived suppressor cell (MDSC) subsets and examined whether any of them correlate with disease severity and prognosis by flow cytometric analysis of blood samples from COVID-19 patients. We observed that polymorphonuclear (PMN)-MDSCs, rather than other MDSC subsets, transiently expanded in severe cases but not in mild or moderate cases. Notably, this subset was selectively expanded in survivors of severe cases and diminished during recovery. Analysis of plasma cytokines/chemokines revealed that interleukin-8 increased prior to PMN-MDSC expansion in survivors and returned to basal levels during the recovery phase. In contrast, interleukin-6 and interferon-γ-induced protein 10 were abundantly induced in non-survivors, suggesting possible downstream targets for the immunosuppressive effects of the MDSC subset. Our data indicate that increased cellularity of PMN-MDSCs might be beneficial for the clinical outcome and could be useful as a possible predictor of prognosis in cases of severe COVID-19.