Coronavirus disease-19 (COVID-19) emerged in late 2019 in China and rapidly became pandemic. As with other coronaviruses, a preponderance of evidence suggests the virus originated in horseshoe bats (Rhinolophus spp.) and may have infected an intermediate host prior to spillover into humans. A significant concern is that SARS-CoV-2 could become established in secondary reservoir hosts outside of Asia. To assess this potential, we challenged deer mice (Peromyscus maniculatus) with SARS-CoV-2 and found robust virus replication in the upper respiratory tract, lungs and intestines, with detectable viral RNA for up to 21 days in oral swabs and 6 days in lungs. Virus entry into the brain also occurred, likely via gustatory-olfactory-trigeminal pathway with eventual compromise to the blood-brain barrier. Despite this, no conspicuous signs of disease were observed, and no deer mice succumbed to infection. Expression of several innate immune response genes were elevated in the lungs, including IFNα, IFNβ, Cxcl10, Oas2, Tbk1 and Pycard. Elevated CD4 and CD8β expression in the lungs was concomitant with Tbx21, IFNγ and IL-21 expression, suggesting a type I inflammatory immune response. Contact transmission occurred from infected to naive deer mice through two passages, showing sustained natural transmission and localization into the olfactory bulb, recapitulating human neuropathology. In the second deer mouse passage, an insertion of 4 amino acids occurred to fixation in the N-terminal domain of the spike protein that is predicted to form a solvent-accessible loop. Subsequent examination of the source virus from BEI Resources determined the mutation was present at very low levels, demonstrating potent purifying selection for the insert during in vivo passage. Collectively, this work has determined that deer mice are a suitable animal model for the study of SARS-CoV-2 respiratory disease and neuropathogenesis, and that they have the potential to serve as secondary reservoir hosts in North America.