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Study Objectives Obstructive sleep apnea (OSA) has been proposed as a risk factor for severe COVID-19. Confounding is an important consideration as OSA is associated with several known risk factors for severe COVID-19. Our aim was to assess the association of OSA with hospitalization due to COVID-19 using a population-based cohort with detailed information on OSA and comorbidities. Methods Included were all community-dwelling Icelandic citizens 18 years of age and older diagnosed with SARS-CoV-2 infection in 2020. Data on demographics, comorbidities, and outcomes of COVID-19 was obtained from centralized national registries. Diagnosis of OSA was retrieved from the centralized Sleep Department Registry at Landspitali - The National University Hospital. Severe COVID-19 was defined as the composite outcome of hospitalization and death. The associations between OSA and the outcome were expressed as odds ratios (OR) with 95% confidence intervals (95% CI), calculated using logistic regression models and inverse probability weighting. Results A total of 4,756 individuals diagnosed with SARS-CoV-2 infection in Iceland were included in the study (1.3% of the Icelandic population), of whom 185 had a diagnosis of OSA. In total, 238 were hospitalized or died, 38 of whom had OSA. Adjusted for age, sex, and BMI, OSA was associated with poor outcome (OR 2.2, 95% CI 1.4-3.5). This association was slightly attenuated (OR 2.0, 95% CI 2.0, 1.2-3.2) when adjusted for demographic characteristics and various comorbidities. Conclusions OSA was associated with twofold increase in risk of severe COVID-19, and the association was not explained by obesity or other comorbidities.