Dexamethasone is a life-saving treatment for severe COVID-19, yet its mechanism of action is unknown, and many patients deteriorate or die despite timely treatment initiation. Here, we identify dexamethasone treatment-induced cellular and molecular changes associated with improved survival in COVID-19 patients. We observed a reversal of transcriptional hallmark signatures in monocytes associated with severe COVID-19 and the induction of a monocyte substate characterized by the expression of glucocorticoid-response genes. These molecular responses to dexamethasone were detected in circulating and pulmonary monocytes, and they were directly linked to survival. Monocyte single-cell RNA sequencing (scRNA-seq)-derived signatures were enriched in whole blood transcriptomes of patients with fatal outcome in two independent cohorts, highlighting the potential for identifying non-responders refractory to dexamethasone. Our findings link the effects of dexamethasone to specific immunomodulation and reversal of monocyte dysregulation, and they highlight the potential of single-cell omics for monitoring in vivo target engagement of immunomodulatory drugs and for patient stratification for precision medicine approaches
