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Estimating rates of COVID-19 infection and associated mortality is challenging due to uncertainties in case ascertainment. We perform a counterfactual time series analysis on overall mortality data from towns in Italy, comparing the population mortality in 2020 with previous years, to estimate mortality from COVID-19. We find that the number of COVID-19 deaths in Italy in 2020 until September 9 was 59,000–62,000, compared to the official number of 36,000. The proportion of the population that died was 0.29% in the most affected region, Lombardia, and 0.57% in the most affected province, Bergamo. Combining reported test positive rates from Italy with estimates of infection fatality rates from the Diamond Princess cruise ship, we estimate the infection rate as 29% (95% confidence interval 15–52%) in Lombardy, and 72% (95% confidence interval 36–100%) in Bergamo. Estimates of COVID-19-related mortality are limited by incomplete testing. Here, the authors perform counterfactual analyses and estimate that there were 59,000–62,000 deaths from COVID-19 in Italy until 9th September 2020, approximately 1.5 times higher than official statistics. [ABSTRACT FROM AUTHOR]