Background Sepsis is a critical and potentially fatal medical condition characterized by significant illness and death rates. Early recognition and assessment of sepsis severity are vital for its optimal management. Determination of its severity by Sequential Organ Failure Assessment (SOFA) and Acute Physiology and Chronic Health Evaluation (APACHE) II, is quite a complex process as these score systems require complex and costly investigations. Therefore, this study was designed to determine the predictive capacity of serum albumin levels for the severity of sepsis in intensive care unit (ICU) patients. Methods This cross-sectional study was carried out on 201 ICU-admitted patients with diagnosed sepsis at Benazir Bhutto Hospital (BBH), Rawalpindi, Pakistan from March 2022 to April 2023. Recruitment of patients was performed through consecutive sampling and predefined inclusion and exclusion criteria. Prior to the data collection, ethical approval and informed consent were obtained. Data was gathered via a self-designed proforma. SOFA score was applied for the determination of the severity of sepsis. Patients were categorized into three groups based on sepsis severity (SOFA score). Data analysis was done in the Statistical Package for the Social Sciences (SPSS) version 25. Descriptive and inferential statistics compared study variables. Pearson's correlation and a simple linear regression model were used to assess the relationship between serum albumin levels and sepsis severity and the predictive capacity of serum albumin levels for sepsis severity respectively. The statistical significance of the p-value was set at less than 0.05. Results Among the 201 patients, 64 (31.84%) had sepsis, 98 (48.75%) had severe sepsis, and 39 (19.41%) had septic shock. Hypoalbuminemia was present among 119 (59.20%) patients while 82 (40.80%) patients had normal albumin levels. Significant differences were found in the total bilirubin, serum creatinine, platelet count, PaO2/FiO2 ratio, mean arterial pressure, Glasgow Coma Scale score, SOFA score, serum albumin level, and the prevalence of normal and low albumin levels across three study groups (p < 0.05). Pearson's correlation analysis showed a strong negative correlation between serum albumin level and SOFA score (correlation coefficient (r) = -0.78, p = 0.001). Linear regression analysis confirmed an inverse relationship between serum albumin levels and SOFA scores (beta coefficient = -2.70, p = 0.002). Conclusions In the present study, serum albumin level was noted as a reliable predictor of sepsis severity in ICU patients. Lower serum albumin levels were associated with higher SOFA scores, indicating more severe sepsis. This study supports the use of serum albumin as a simple and cost-effective biomarker for early identification of sepsis severity, particularly in resource-limited settings.