Expression and certain SNPs of interferon lambda 3 and 4 (IFNL3 and 4) have been associated with variable outcomes in COVID-19 patients in different regions, suggesting population-specific differences in the disease outcome. This study examined the association of INFL3 and INFL4 SNPs (rs12979860 and rs368234815, respectively) and nasopharyngeal expression with COVID-19 disease severity in Pakistani patients. For this study, 117 retrospectively collected nasopharyngeal swab samples were used from individuals with mild and severe COVID-19 disease. qPCR assays were used to determine the viral loads and mRNA expression of IFNL3 and 4 through the Ct and delta Ct methods, respectively. Due to funding limitations, only one SNP each in INFL3 and INFL4 (found to be most significant through literature search) was analyzed using tetra-arm PCR and RFLP-PCR strategies, respectively. The Mann-Whitney U-test was applied to evaluate the statistical differences in the expression of IFNL3/4 genes in the mild and severe groups, while for SNPs, a Chi-square test was employed. A multivariate Cox regression test was performed to assess the relationship of different variables with COVID-19 severity. Comparative analysis of SNPs between mild and severe groups showed only the difference in SNP of the IFNL4 gene to be statistically significant (p = 0.001). Similarly, nasopharyngeal expression of IFNL3 and IFNL4 genes, respectively, was found to be 3.48-fold less and 3.48-fold higher in the severe group as compared to the mild group. Multivariate analysis revealed SNP in the IFNL4 gene and age to have a significant association with COVID-19 severity. Despite the small sample size, IFNL4 gene SNP and patient age were associated with COVID-19 severity. Age, IFNL3/IFNL4 mRNA expression in the nasopharyngeal milieu, and the presence of SNP in the IFNL4 (rs368234815) gene in COVID-19 patients may be biomarkers for infection severity and help improve SARS-CoV-2 infection management.