Abstract Background SARS-CoV-2 infection leads to acute lung injury (ALI) and acute respiratory distress syndrome (ARDS). Both clinical data and animal experiments suggest that the renin–angiotensin system (RAS) is involved in the pathogenesis of SARS-CoV-2-induced ALI. Angiotensin-converting enzyme 2 (ACE2) is the functional receptor for SARS-CoV-2 and a crucial negative regulator of RAS. Recombinant ACE2 protein (rACE2) has been demonstrated to play protective role against SARS-CoV and avian influenza-induced ALI, and more relevant, rACE2 inhibits SARS-CoV-2 proliferation in vitro. However, whether rACE2 protects against SARS-CoV-2-induced ALI in animal models and the underlying mechanisms have yet to be elucidated. Methods and Results Here, we demonstrated that the SARS-CoV-2 spike receptor-binding domain (RBD) protein aggravated lipopolysaccharide (LPS)-induced ALI in mice. SARS-CoV-2 spike RBD protein directly binds and downregulated ACE2, leading to an elevation in angiotensin (Ang) II. AngII further increased the NOX1/2 through AT1R, subsequently causing oxidative stress and uncontrolled inflammation and eventually resulting in ALI/ARDS. Importantly, rACE2 remarkably reversed SARS-CoV-2 spike RBD protein-induced ALI by directly binding SARS-CoV-2 spike RBD protein, cleaving AngI or cleaving AngII. Conclusion This study is the first to prove that rACE2 plays a protective role against SARS-CoV-2 spike RBD protein-aggravated LPS-induced ALI in an animal model and illustrate the mechanism by which the ACE2-AngII-AT1R-NOX1/2 axis might contribute to SARS-CoV-2-induced ALI.