We report the first Human Immune System (HIS)-humanized mouse model ("DRAGA": HLA-A2.HLA-DR4.Rag1KO.IL-2RγcKO.NOD) for COVID-19 research. This mouse is reconstituted with human cord blood-derived, HLA-matched hematopoietic stem cells. It engrafts human epi/endothelial cells expressing the human ACE2 receptor for SARS-CoV-2 and TMPRSS2 serine protease co-localized on lung epithelia. HIS-DRAGA mice sustained SARS-CoV-2 infection, showing deteriorated clinical condition, replicating virus in the lungs, and human-like lung immunopathology including T-cell infiltrates, microthrombi and pulmonary sequelae. Among T-cell infiltrates, lung-resident (CD103 +) CD8 + T cells were sequestered in epithelial (CD326 +) lung niches and secreted granzyme B and perforin, indicating cytotoxic potential. Infected mice also developed antibodies against the SARS-CoV-2 viral proteins. Hence, HIS-DRAGA mice showed unique advantages as a surrogate in vivo human model for studying SARS-CoV-2 immunopathology and for testing the safety and efficacy of candidate vaccines and therapeutics.