Cytokine storm and multi-organ failure are the main causes of SARS-CoV-2-related death. However, the origin of excessive damages caused by SARS-CoV-2 remains largely unknown. Here we show that the SARS-CoV-2 envelope (2-E) protein alone is able to cause acute respiratory distress syndrome (ARDS)-like damages in vitro and in vivo. 2-E proteins were found to form a type of pH-sensitive cation channels in bilayer lipid membranes. As observed in SARS-CoV-2-infected cells, heterologous expression of 2-E channels induced rapid cell death in various susceptible cell types and robust secretion of cytokines and chemokines in macrophages. Intravenous administration of purified 2-E protein into mice caused ARDS-like pathological damages in lung and spleen. A dominant negative mutation lowering 2-E channel activity attenuated cell death and SARS-CoV-2 production. Newly identified channel inhibitors exhibited potent anti-SARS-CoV-2 activity and excellent cell protective activity in vitro and these activities were positively correlated with inhibition of 2-E channel. Importantly, prophylactic and therapeutic administration of the channel inhibitor effectively reduced both the viral load and secretion of inflammation cytokines in lungs of SARS-CoV-2-infected transgenic mice expressing human angiotensin-converting enzyme 2 (hACE-2). Our study supports that 2-E is a promising drug target against SARS-CoV-2.