Infection with the severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) is associated with acute and postacute cognitive and neuropsychiatric symptoms including impaired memory, concentration, attention, sleep and affect. Mechanisms underlying these brain symptoms remain understudied. Here we report that SARS-CoV-2-infected hamsters exhibit a lack of viral neuroinvasion despite aberrant blood–brain barrier permeability. Hamsters and patients deceased from coronavirus disease 2019 (COVID-19) also exhibit microglial activation and expression of interleukin (IL)-1β and IL-6, especially within the hippocampus and the medulla oblongata, when compared with non-COVID control hamsters and humans who died from other infections, cardiovascular disease, uraemia or trauma. In the hippocampal dentate gyrus of both COVID-19 hamsters and humans, we observed fewer neuroblasts and immature neurons. Protracted inflammation, blood–brain barrier disruption and microglia activation may result in altered neurotransmission, neurogenesis and neuronal damage, explaining neuropsychiatric presentations of COVID-19. The involvement of the hippocampus may explain learning, memory and executive dysfunctions in COVID-19 patients.