AbstractSARS-CoV-2, the culprit pathogen of COVID-19, elicits prominent immune responses and cytokine storms. Intracellular Cl⁻ is a crucial regulator of host defense, whereas the role of Cl⁻ signaling pathway in modulating pulmonary inflammation associated with SARS-CoV-2 infection remains unclear. By using human respiratory epithelial cell lines, primary cultured human airway epithelial cells, and murine models of viral structural protein stimulation and SARS-CoV-2 direct challenge, we demonstrated that SARS-CoV-2 nucleocapsid (N) protein could interact with Smad3, which downregulated cystic fibrosis transmembrane conductance regulator (CFTR) expression via microRNA-145. The intracellular Cl⁻ concentration ([Cl⁻]_i) was raised, resulting in phosphorylation of serum glucocorticoid regulated kinase 1 (SGK1) and robust inflammatory responses. Inhibition or knockout of SGK1 abrogated the N protein-elicited airway inflammation. Moreover, N protein promoted a sustained elevation of [Cl⁻]_i by depleting intracellular cAMP via upregulation of phosphodiesterase 4 (PDE4). Rolipram, a selective PDE4 inhibitor, countered airway inflammation by reducing [Cl⁻]_i. Our findings suggested that Cl⁻ acted as the crucial pathological second messenger mediating the inflammatory responses after SARS-CoV-2 infection. Targeting the Cl⁻ signaling pathway might be a novel therapeutic strategy for COVID-19.