Angiotensin converting enzyme 2 (ACE2) is a host ectopeptidase and the receptor for the SARS-CoV-2 virus, albeit virus-ACE2 interaction goes far beyond viral entry into target cells. Controversial data exists linking viral infection to changes in ACE2 expression and function, which might influence the subsequent induction of an inflammatory response. Here, we tested the significance of soluble ACE2 enzymatic activity longitudinally in nasopharyngeal swabs and plasma samples of SARS-CoV-2 infected patients, along with the induction of inflammatory cytokines. Release of soluble functional ACE2 increases upon SARS-CoV-2 infection in swabs and plasma of infected patients, albeit rapidly decreasing during infection course in parallel with ACE2 gene expression. Similarly, SARS-CoV-2 infection also induced the expression of inflammatory cytokines. These changes positively correlated with the viral load. Overall, our results demonstrate the existence of mechanisms by which SARS-CoV-2 modulates ACE2 expression and function, intracellular viral sensing and subsequent inflammatory response, offering new insights into ACE2 dynamics in the human upper respiratory tract and pointing towards soluble ACE2 levels as a putative early biomarker of infection severity.