Coronavirus disease 2019 (COVID-19) is a disease characterized by a profound dysregulation of the innate immune system. This knowledge has emerged from the large body of single-cell omics studies of patients with COVID-19, which have provided one of the most detailed cellular atlases of a human disease ever. However, we are only beginning to understand the innate immunological pathways that govern host defense and immunopathology in COVID-19. In this review, we discuss the emerging understanding of how SARS-CoV-2 and host-derived molecules activate specific pattern recognition receptors to elicit protective interferon responses and pathological cytokine responses, with particular focus on acute infection of the lung and lung pathophysiology in critical COVID-19. In addition, we discuss how these pathways are modulated by virus-host interactions and host stress-sensing pathways. In-depth understanding of the disease mechanisms will likely uncover specific molecular targets for the treatment of COVID-19 and other emerging viral infections. In addition, it will reveal the fine balance between beneficial protective versus pathological disease causing immune responses.