Background High concentration of Angiotensin converting enzyme receptors in the proximal tubules make kidneys an early target in COVID-19. Proximal tubular dysfunction (PTD) may act as an early predictor of acute kidney injury (AKI) and more severe disease. Methods This prospective observational study was conducted in the COVID unit, Bangabandhu Sheikh Mujib Medical University. 87 COVID-19 patients without known kidney disease were screened for 6 markers of PTD on admission-hyperuricosuria, normoglycemic glycosuria, proteinuria, renal phosphate leak, sodium leak and potassium leak. Positivity of 2 of the first 4 markers was considered as PTD. 35 patients with PTD and 35 without PTD were followed up throughout their hospital stay. Results 52.9% had PTD on admission. The most prevalent markers were renal sodium leak (67%), followed by proteinuria (66.7%), hyperuricosuria (42.5%), potassium leak (32.2%), phosphate leak (28.7%) and normoglycemic glycosuria (20.7%). Mean age was 55.7 years. 32.9% patients developed AKI. PTD group had higher odds of developing AKI (odds ratio 17.5 for stage 1, 24.8 for stage 2 and 25.5 for stage 3; p<0.0001). The mean duration of hospital stay was 9 days higher in the PTD group (p<0.001). PTD group also had higher odds of transferring to ICU (OR = 9.4, p = 0.002), need for mechanical ventilation (OR = 10.1, p = 0.002) and death (OR = 10.3, p = 0.001). 32.6% had complete PTD recovery during follow-up. Conclusion Proximal tubular dysfunction is highly prevalent in COVID-19 patients very early in the disease and may act as a predictor of AKI, ICU transfer, need for mechanical ventilation and death.