Interferon stimulated gene 15 (ISG15) is a ubiquitin like modifier frequently induced during virus infections and involved in versatile host defense mechanisms. Not surprisingly, many viruses including SARS-CoV-2 have evolved de-ISGylating activities to antagonize its effect. In this study we compared ISG15-driven macrophage responses upon infection by influenza, Zika and SARS-CoV-2 viruses. ISG15 and its modifying enzymes were upregulated in human macrophages after infection with all three viruses. While influenza and Zika viruses induced cellular ISGylation, SARS-CoV-2 triggered hydrolysis of ISG15 modifications instead, to generate free, extracellular ISG15 from macrophages and dendritic cells, but not from bronchial epithelial cells. Extracellular ISG15 was released independent of the conventional secretory pathway or cell death, but instead, depended on a non-classical autophagy-related secretory process. Increase of extracellular ISG15 was also reflected in serum samples from COVID-19 patients. The high ratio of free versus conjugated ISG15 in SARS-CoV-2 infected cells triggered macrophage polarization towards a M1 phenotype, increased secretion of pro-inflammatory cytokines, e.g. MCP-1 (CCL2), IL-1, TNF and IL-6, and attenuated antigen presentation. Depleting ISG15 conjugating enzymes Ube1L and HERC5 further increased free ISG15 and exacerbated this effect. We could recapitulate this phenomenon by expressing the wild-type but not the catalytically inactive PLpro de-ISGylating enzyme of SARS-CoV-2. Proteomic analyses of the secretome from SARS-CoV-2 infected macrophages revealed that besides ISG15, it displayed significant enrichment in non-classical secretory proteins and inflammatory responses, which was further amplified by free ISG15. Collectively, our results indicate that increased proportions of free ISG15 dramatically alter macrophage responses and is likely a key feature of cytokine storms triggered by highly pathogenic respiratory viruses such as influenza and SARS-CoV-2.