COVID-19 is a transmissible respiratory disease caused by a novel coronavirus, SARS-CoV-2, and has become a global health emergency. There is an urgent need for robust and practical in vitro model systems to investigate viral pathogenesis. Here, we generated human induced pluripotent stem cell (iPSC)-derived lung organoids (LORGs), cerebral organoids (CORGs), neural progenitor cells (NPCs), neurons, and astrocytes. LORGs containing epithelial cells, alveolar types 1 and 2, highly express ACE2 and TMPRSS2 and are permissive to SARS-CoV-2 infection. SARS-CoV-2 infection induces interferons, cytokines, and chemokines and activates critical inflammasome pathway genes. Spike protein inhibitor, EK1 peptide, and TMPRSS2 inhibitors (camostat/nafamostat) block viral entry in LORGs. Conversely, CORGs, NPCs, astrocytes, and neurons express low levels of ACE2 and TMPRSS2 and correspondingly are not highly permissive to SARS-CoV-2 infection. Infection in neuronal cells activates TLR3/7, OAS2, complement system, and apoptotic genes. These findings will aid in understanding COVID-19 pathogenesis and facilitate drug discovery.