Background: Severe Acute Respiratory Syndrome Coronavirus Type 2 (SARS-CoV-2) induces a global serious pandemic and is responsible for over 4 million human deaths. Currently, although various vaccines have been developed, humans can still get SARS-CoV-2 infection after being vaccinated. Therefore, the blocking of SARS-CoV-2 infection may be potential therapeutic strategies. Ganoderma microsporum immunomodulatory protein (GMI), a small fungal protein, is cloned from Ganoderma microsporum. It exhibits anti-cancer and immunomodulatory functions. Currently, it is still unclear whether GMI involves in interfering with viral infection. Purpose: This study aimed to examine the potential functions and mechanisms of GMI on inhibiting SARS-CoV-2 pseudovirus infection. Methods: The effects of GMI were examined in vitro on ACE2 overexpressing HEK293T (HEK293T/ACE2) cells exposed to SARS-CoV-2 Spike lentiviral pseudovirus encoding a green fluorescent protein (GFP) gene. The infection efficacy was determined using fluorescence microscopy and flow cytometry. The protein level of ACE2 was verified by Western blot. The effects of GMI on cell viability of HEK293T/ACE2 and lung epithelial WI38–2RA cells were determined by MTT assay. Mice received GMI via nebulizer. Results: GMI did not affect the cell viability of HEK293T/ACE2, WI38–2RA and macrophages. Functional studies showed that GMI inhibited GFP expressing SARS-CoV-2 pseudovirus from infecting HEK293T/ACE2 cells. GMI slightly interfered the interaction between ACE2 and Spike protein. GMI interacted with S2 domain of Spike protein. Specifically, GMI dramatically reduced ACE2 expression in HEK293T/ACE2 and WI38–2RA cells. Mechanistically, GMI induced ACE2 degradation via activating protein degradation system, including proteasome and lysosome. Abolishing proteasome and lysosome by MG132 and bafilomycin A1, respectively, rescued GMI-reduced ACE2 levels. In addition, GMI triggered dynamin and lipid raft-mediated ACE2 endocytosis. ACE2 levels were downregulated in the lung tissue after the mice inhaling GMI. Conclusions: GMI prevents SARS-CoV-2 pseudovirus infection via induction of ACE2 degradation in host cells. Our findings suggest that GMI will be a potential prevention agent to alleviate SARS-CoV-2 infection.