Cholesterol 25-hydroxylase (CH25H) is an interferon (IFN)-stimulated gene that shows broad antiviral activities against a wide range of enveloped viruses. Here, using an IFN-stimulated gene screen against vesicular stomatitis virus (VSV)-SARS-CoV and VSV-SARS-CoV-2 chimeric viruses, we identified CH25H and its enzymatic product 25-hydroxycholesterol (25HC) as potent inhibitors of SARS-CoV-2 replication. Internalized 25HC accumulates in the late endosomes and potentially restricts SARS-CoV-2 spike protein catalyzed membrane fusion via blockade of cholesterol export. Our results highlight one of the possible antiviral mechanisms of 25HC and provide the molecular basis for its therapeutic development.