Interferon-induced transmembrane protein 3 (IFITM3) is a host antiviral protein that alters cell membranes to block fusion of viruses. Published reports have identified conflicting pro- and antiviral effects of IFITM3 on SARS-CoV-2 in cultured cells, and its impact on viral pathogenesis in vivo remains unclear. Here, we show that IFITM3 knockout (KO) mice infected with mouse-adapted SARS-CoV-2 experienced extreme weight loss and lethality, while wild type (WT) mice lost minimal weight and recovered. KO mice had higher lung viral titers and increases in lung inflammatory cytokine levels, CD45-positive immune cell infiltration, and histopathology, compared to WT mice. Mechanistically, we observed disseminated viral antigen staining throughout the lung tissue and pulmonary vasculature in KO mice, while staining was observed in confined regions in WT lungs. Global transcriptomic analysis of infected lungs identified upregulation of gene signatures associated with interferons, inflammation, and angiogenesis in KO versus WT animals, highlighting changes in lung gene expression programs that precede severe lung pathology and fatality. Corroborating the protective effect of IFITM3 in vivo , K18-hACE2/IFITM3 KO mice infected with non-adapted SARS-CoV-2 showed enhanced, rapid weight loss and early death compared to control mice. Increased heart infection was observed in both mouse models in the absence of IFITM3, indicating that IFITM3 constrains extrapulmonary dissemination of SARS-CoV-2. Our results establish IFITM3 KO mice as a new animal model for studying severe SARS-CoV-2 infection of the lung and cardiovascular system, and overall demonstrate that IFITM3 is protective in SARS-CoV-2 infections of mice.