Summary Background Coronavirus disease 2019 (COVID-19) is an immune-related disorder caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). The complete pathogenesis of the virus remains to be determined. Unraveling the molecular mechanisms governing SARS-CoV-2 interactions with host cells is crucial for the formulation of effective prophylactic measures and the advancement of COVID-19 therapeutics. Methods We analyzed human lung single-cell RNA sequencing dataset to discern the association of butyrophilin subfamily 3 member A2 ( BTN3A2 ) expression with COVID-19. The BTN3A2 gene edited cell lines and transgenic mice were infected by live SARS-CoV-2 in a biosafety level 3 (BSL-3) laboratory. Immunoprecipitation, flow cytometry, biolayer interferometry and competition ELISA assays were performed in BTN3A2 gene edited cells. We performed quantitative real-time PCR, histological and/or immunohistochemical analyses for tissue samples from mice with or without SARS-CoV-2 infection. Findings The BTN3A2 mRNA level was correlated with COVID-19 severity. BTN3A2 expression was predominantly identified in epithelial cells, elevated in pathological epithelial cells from COVID-19 patients and co-occurred with ACE2 expression in the same lung cell subtypes. BTN3A2 targeted the early stage of the viral life cycle by inhibiting SARS-CoV-2 attachment through interactions with the receptor-binding domain (RBD) of the Spike protein and ACE2. BTN3A2 inhibited ACE2-mediated SARS-CoV-2 infection by reducing ACE2 in vitro and in vivo . Interpretation These results reveal a key role of BTN3A2 in the fight against COVID-19. Identifying potential monoclonal antibodies which mimic BTN3A2 may facilitate disruption of SARS-CoV-2 infection, providing a therapeutic avenue for COVID-19. Funding This study was supported by the National Natural Science Foundation of China (32070569, U1902215, and 32371017), the CAS “Light of West China” Program, and Yunnan Province (202305AH340006). Research in context Evidence before this study Our understanding of the pathogenesis of COVID-19, especially key molecular events in the early stage of viral infection, remains incompletely albeit we witnessed many progresses. This knowledge gap hinders the finding for effective and specific antiviral agents against SARS-CoV-2. The entry of SARS-CoV-2 is mediated by the entry receptor angiotensin-converting enzyme 2 (ACE2) and is affected by host antiviral defenses. Targeting these universal host factors required for virus replication is the most promising approach for effective prevention and treatment of COVID-19. Added value of this study Our study revealed that BTN3A2, a primate-specific gene, acts as a potent inhibitor of SARS-CoV-2 infection in vitro and in vivo . The up-regulation of BTN3A2 upon SARS-CoV-2 infection competed with the ACE2 receptor for binding to the Spike protein, subsequently reducing ACE2 expression and ACE2-mediated SARS-CoV-2 entry. Implications of all the available evidence These data highlighted that BTN3A2 as a novel host factor with protective effects against SARS-CoV-2 infection. The BTN3A2 holds considerable potential as a therapeutic drug for mitigating the impact of SARS-CoV-2 and its variants of concern (VOCs).