COVID-19 patients commonly present with signs of central nervous system and/or peripheral nervous system dysfunction. Here, we show that midbrain dopamine (DA) neurons derived from human pluripotent stem cells (hPSCs) are selectively susceptible and permissive to severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) infection. SARS-CoV-2 infection of DA neurons triggers an inflammatory and cellular senescence response. High-throughput screening in hPSC-derived DA neurons identified several FDA-approved drugs that can rescue the cellular senescence phenotype by preventing SARS-CoV-2 infection. We also identified the inflammatory and cellular senescence signature and low levels of SARS-CoV-2 transcripts in human substantia nigra tissue of COVID-19 patients. Furthermore, we observed reduced numbers of neuromelanin+ and tyrosine-hydroxylase (TH)+ DA neurons and fibers in a cohort of severe COVID-19 patients. Our findings demonstrate that hPSC-derived DA neurons are susceptible to SARS-CoV-2, identify candidate neuroprotective drugs for COVID-19 patients, and suggest the need for careful, long-term monitoring of neurological problems in COVID-19 patients.