Introduction & objectives: The independent effect of liver biochemistries as a prognostic factor in patients with COVID-19 has not been completely addressed. We aimed to evaluate the prognostic value of abnormal liver tests on admission of hospitalized patients with COVID-19. Materials & methods: We performed a prospective cohort study including 1611 hospitalized patients with confirmed SARS-CoV-2 infection from April 15, 2020 through July 31, 2020 in 38 different Hospitals from 11 Latin American countries. We registered clinical and laboratory parameters, including liver function tests, on admission and during hospitalization. All patients were followed until discharge or death. We fit multivariable logistic regression models, further post-estimation effect through margins and inverse probability weighting. Results: Overall, 57.8% of the patients were male with a mean age of 52.3 years, 8.5% had chronic liver disease and 3.4% had cirrhosis. Abnormal liver tests on admission were present on 45.2% (CI 42.7–47.7) of the cohort (n = 726). Overall, 15.1% (CI 13.4–16.9) of patients died (n = 244). Patients with abnormal liver tests on admission presented higher mortality 18.7% (CI 15.9–21.7), compared to those with normal liver biochemistries 12.2% (CI 10.1–14.6); P <.0001). After excluding patients with history of chronic liver disease, abnormal liver tests on admission were independently associated with death [OR 1.5 (CI 1.1–2.0); P = 0.01], and severe COVID-19 (2.6 [2.0–3.3], P <.0001), both adjusted by age, gender, diabetes, pneumonia and body mass index >30. Conclusions: The presence of abnormal liver tests on admission is independently associated with mortality and severe COVID-19 in hospitalized patients with COVID-19 infection and may be used as surrogate marker of inflammation. Clinicaltrials.gov: NCT04358380.