Summary SARS-CoV-2 infection causes an inflammatory cytokine storm and acute lung injury. Currently there are no effective antiviral and/or anti-inflammatory therapies. Here we demonstrate that 2019 SARS-CoV-2 spike protein subunit 1 (CoV2-S1) induces high levels of NF-κB activations, production of pro-inflammatory cytokines and mild epithelial damage, in human bronchial epithelial cells. CoV2-S1-induced NF-κB activation requires S1 interaction with human ACE2 receptor and early activation of endoplasmic reticulum (ER) stress, and associated unfolded protein response (UPR), and MAP kinase signalling pathways. We developed an antagonistic peptide that inhibits S1-ACE2 interaction and CoV2-S1-induced productions of pro-inflammatory cytokines. The existing FDA-approved ER stress inhibitor, 4-phenylburic acid (4-PBA), and MAP kinase inhibitors, trametinib and ulixertinib, ameliorated CoV2-S1-induced inflammation and epithelial damage. These novel data highlight the potentials of peptide-based antivirals for novel ACE2-utilising CoVs, while repurposing existing drugs may be used as treatments to dampen elevated inflammation and lung injury mediated by SARS-CoV-2.