COVID-19 patients commonly present with neurological signs of central nervous system (CNS) and/or peripheral nervous system dysfunction. However, which neural cells are permissive to infection by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) has been controversial. Here, we show that midbrain dopamine (DA) neurons derived from human pluripotent stem cells (hPSCs) are selectively permissive to SARS-CoV-2 infection both in vitro and upon transplantation in vivo, and that SARS-CoV-2 infection triggers a DA neuron inflammatory and cellular senescence response. A high-throughput screen in hPSC-derived DA neurons identified several FDA approved drugs, including riluzole, metformin, and imatinib, that can rescue the cellular senescence phenotype and prevent SARS-CoV-2 infection. RNA-seq analysis of human ventral midbrain tissue from COVID-19 patients, using formalin-fixed paraffin-embedded autopsy samples, confirmed the induction of an inflammatory and cellular senescence signature and identified low levels of SARS-CoV-2 transcripts. Our findings demonstrate that hPSC-derived DA neurons can serve as a disease model to study neuronal susceptibility to SARS-CoV-2 and to identify candidate neuroprotective drugs for COVID-19 patients. The susceptibility of hPSC-derived DA neurons to SARS-CoV-2 and the observed inflammatory and senescence transcriptional responses suggest the need for careful, long-term monitoring of neurological problems in COVID-19 patients.