Background: Area deprivation has been shown to be associated with various adverse health outcomes including communicable as well as non-communicable diseases. Our objective was to assess potential associations between area deprivation and COVID-19 standardized incidence and mortality ratios in Bavaria over a period of nearly 2 years. Bavaria is the federal state with the highest infection dynamics in Germany and demographically comparable to several other European countries. Methods: In this retrospective, observational ecological study, we estimated the strength of associations between area deprivation and standardized COVID-19 incidence and mortality ratios (SIR and SMR) in Bavaria, Germany. We used official SARS-CoV-2 reporting data aggregated in monthly periods between March 1, 2020 and December 31, 2021. Area deprivation was assessed using the quintiles of the 2015 version of the Bavarian Index of Multiple Deprivation (BIMD 2015) at district level, analyzing the overall index as well as its single domains. Results: Deprived districts showed higher SIR and SMR than less deprived districts. Aggregated over the whole period, the SIR increased by 1.04 (95% confidence interval (95% CI): 1.01 to 1.07, p = 0.002), and the SMR by 1.11 (95% CI: 1.07 to 1.16, p < 0.001) per BIMD quintile. This represents a maximum difference of 41% between districts in the most and least deprived quintiles in the SIR and 110% in the SMR. Looking at individual months revealed clear linear association between the BIMD quintiles and the SIR and SMR in the first, second and last quarter of 2021. In the summers of 2020 and 2021, infection activity was low. Conclusions: In more deprived areas in Bavaria, Germany, higher incidence and mortality ratios were observed during the COVID-19 pandemic with particularly strong associations during infection waves 3 and 4 in 2020/2021. Only high infection levels reveal the effect of risk factors and socioeconomic inequalities. There may be confounding between the highly deprived areas and border regions in the north and east of Bavaria, making the relationship between area deprivation and infection burden more complex. Vaccination appeared to balance incidence and mortality rates between the most and least deprived districts. Vaccination makes an important contribution to health equality.