Background Treatment of severely ill COVID-19 patients requires simultaneous management of oxygenation and inflammation without compromising viral clearance. While multiple tools are available to aid oxygenation, data supporting immune biomarkers for monitoring the host-pathogen interaction across disease stages and for titrating immunomodulatory therapy is lacking. Methods In this single-center cohort study, we used an immunoassay platform that enables rapid and quantitative measurement of interferon [gamma]-induced protein 10 (IP-10), a host protein involved in lung injury from virus-induced hyperinflammation. A dynamic clinical decision support protocol was followed to manage patients infected with severe acute respiratory syndrome coronavirus 2 and examine the potential utility of timely and serial measurements of IP-10 as tool in regulating inflammation. Results Overall, 502 IP-10 measurements were performed on 52 patients between 7 April and 10 May 2020, with 12 patients admitted to the intensive care unit. IP-10 levels correlated with COVID-19 severity scores and admission to the intensive care unit. Among patients in the intensive care unit, the number of days with IP-10 levels exceeding 1,000 pg/mL was associated with mortality. Administration of corticosteroid immunomodulatory therapy decreased IP-10 levels significantly. Only two patients presented with subsequent IP-10 flare-ups exceeding 1,000 pg/mL and died of COVID-19-related complications. Conclusions Serial and readily available IP-10 measurements potentially represent an actionable aid in managing inflammation in COVID-19 patients and therapeutic decision-making. Trial registration Clinicaltrials.gov, NCT04389645, retrospectively registered on May 15, 2020.