SARS-CoV-2, the etiologic agent of COVID-19, uses ACE2 as a cell entry receptor. Soluble ACE2 has been shown to have neutralizing antiviral activity but has a short half-life and no active transport mechanism from the circulation into the alveolar spaces of the lung. To overcome this, we constructed an ACE2-human IgG1 fusion protein with mutations in the catalytic domain of ACE2. A mutation in the catalytic domain of ACE2, MDR504, significantly increased binding to SARS-CoV-2 spike protein, as well as to a spike variant, with more potent viral neutralization in plaque assays. Parental administration of the protein showed stable serum concentrations with excellent bioavailability in the epithelial lining fluid of the lung, and ameliorated lung SARS-CoV-2 infection . These data support that the MDR504 hACE2-Fc is an excellent candidate for treatment or prophylaxis of COVID-19 and potentially emerging variants.