Multisystem inflammatory syndrome in children (MIS-C) is a delayed-onset, COVID-19-related hyperinflammatory illness characterized by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) antigenemia, cytokine storm, and immune dysregulation. In severe COVID-19, neutrophil activation is central to hyperinflammatory complications, yet the role of neutrophils in MIS-C is undefined. Here, we collect blood from 152 children: 31 cases of MIS-C, 43 cases of acute pediatric COVID-19, and 78 pediatric controls. We find that MIS-C neutrophils display a granulocytic myeloid-derived suppressor cell (G-MDSC) signature with highly altered metabolism that is distinct from the neutrophil interferon-stimulated gene (ISG) response we observe in pediatric COVID-19. Moreover, we observe extensive spontaneous neutrophil extracellular trap (NET) formation in MIS-C, and we identify neutrophil activation and degranulation signatures. Mechanistically, we determine that SARS-CoV-2 immune complexes are sufficient to trigger NETosis. Our findings suggest that hyperinflammatory presentation during MIS-C could be mechanistically linked to persistent SARS-CoV-2 antigenemia, driven by uncontrolled neutrophil activation and NET release in the vasculature.