The urgent need for an effective SARS-CoV-2 vaccine has forced development to progress in the absence of well-defined correlates of immunity. While neutralization has been linked to protection against other pathogens, whether neutralization alone will be sufficient to drive protection against SARS-CoV-2 in the broader population remains unclear. Therefore, to fully define protective humoral immunity, we dissected the early evolution of the humoral response in 193 hospitalized individuals ranging from moderate to severe. Although robust IgM and IgA responses evolved in both survivors and non-survivors with severe disease, non-survivors showed attenuated IgG responses, accompanied by compromised Fcɣ receptor binding and Fc effector activity, pointing to deficient humoral development rather than disease-enhancing humoral immunity. In contrast, individuals with moderate disease exhibited delayed responses that ultimately matured. These data highlight distinct humoral trajectories associated with resolution of SARS-CoV-2 infection and the need for early functional humoral immunity.