The COVID-19 pandemic has inflicted a massive disease burden globally, involving 623 million confirmed cases with 6.55 million deaths, and in Bangladesh, over 2.02 million clinically confirmed cases of COVID-19, with 29,371 deaths, have been reported. Evidence showed that vaccines significantly reduced infection, severity, and mortality across a wide age range of populations. This study investigated the hospitalization and mortality by vaccination status among COVID-19 patients in Bangladesh and identified the vaccine's effectiveness against severe outcomes in real-world settings. Between August and December 2021, we conducted this cross-sectional survey among 783 RT-PCR-confirmed COVID-19 hospitalized patients admitted to three dedicated COVID-19 hospitals in Bangladesh. The study used a semi-structured questionnaire to collect information. We reviewed the patient's records and gathered COVID-19 immunization status from the study participants or their caregivers. Patients with incomplete or partial data from the record were excluded from enrollment. Logistic regression analyses were performed to determine the association between key variables with a patient's vaccination status and mortality. The study revealed that overall hospitalization, severity, and morality were significantly high among unvaccinated study participants. Only one-fourth (25%) of hospitalized patients were found COVID-19 vaccinated. Morality among unvaccinated COVID-19 study participants was significantly higher (AOR: 7.17) than the vaccinated (11.17% vs. 1.53%). Severity was found to be seven times higher among unvaccinated patients. Vaccination coverage was higher in urban areas (29.8%) compared to rural parts (20.8%), and vaccine uptake was lower among female study participants (22.7%) than male (27.6%). The study highlighted the importance of COVID-19 vaccines in reducing mortality, hospitalization, and other severe consequences. We found a gap in vaccination coverage between urban and rural settings. The findings would encourage the entire population toward immunization and aid the policymakers in the ground reality so that more initiatives are taken to improve vaccination coverage among the pocket population.