Pulmonary fibrosis, profound alveolitis, and the failure to restore alveolar epithelial architecture are major causes of respiratory failure in fatal COVID-19. However, contributing factors to abnormal fibrosis in critically ill COVID-19 patients are yet to be understood. This study analyzed the histopathology of lung autopsy samples from eight COVID-19 and six non-COVID-19 post-mortems. The distribution and changes in extracellular matrix (ECM) proteins, including elastin and collagen in lung alveoli, were quantitatively assessed through morphometric analyses. These studies reveal massive degradation of elastin fibers along the thin-alveolar walls of the lung parenchyma that supersedes interstitial collagenous fibrosis and intra-alveolar fibrotic abnormalities. Injured lungs with collapsed alveoli and organized fibrotic regions exhibited widespread elastolysis. Further, immunoblotting of lung autopsy extracts validated extensive elastin degradation. Importantly, loss of elastin was correlated with induction of neutrophil elastase (NE), a potent protease that degrades ECM, and increased staining of peptidylarginine deiminase, a marker for neutrophil extracellular traps release, and extensive epithelial necrosis. Further, elevated plasma levels of NE-alpha1-antitrypsin complex in hospitalized COVID-19 patients indicate dysregulated neutrophil activity. These findings place elastin degradation at the center of alveolar structural disintegration and argue that elastolysis and alveolitis lead to abnormal ECM repair and fibrosis in fatal COVID-19.