Pathogenic infections cause thymic atrophy, perturb thymic T-cell development, and alter immunological response. Previous studies reported dysregulated T-cell function and lymphopenia in coronavirus disease-19 (COVID-19). However, immunopathological changes in the thymus associated with severe acute respiratory syndrome coronavirus-2 (SARS-CoV-2) infection have not been elucidated. Here, we report that SARS-CoV-2 infects thymocytes, and induces CD4+CD8+ (double positive; DP) T-cell apoptosis leading to thymic atrophy and loss of peripheral TCR repertoire in K18-hACE2 transgenic mice. Infected thymus led to increased CD44+CD25- T-cells, indicating an early arrest in the T-cell maturation pathway. Thymic atrophy was notably higher in male hACE2-Tg mice than in females and involved an upregulated de-novo synthesis pathway of thymic glucocorticoid. Further, IFN-γ was crucial for thymic atrophy, as anti-IFN-γ -antibody neutralization bluntedthymic involution. Therapeutic use of Remdesivir also rescued thymic atrophy. While the Omicron variant and its sub-lineage BA.5 variant caused marginal thymic atrophy, the delta variant of SARS-CoV-2 exhibited severe thymic atrophy characterized by severely depleted DP T-cells. Recently characterized broadly SARS-CoV-2 neutralizing monoclonal antibody P4A2 was able to rescue thymic atrophy and restore the thymic maturation pathway of T-cells. Together, we report SARS-CoV-2-associated thymic atrophy resulting from impaired T-cell maturation pathway which may contribute to dyregulated T cell response during COVID-19.