The ongoing evolution of SARS-CoV-2 to evade vaccines and therapeutics underlines the need for innovative therapies with high genetic barriers to resistance. Therefore, there is pronounced interest in identifying new pharmacological targets in the SARS-CoV-2 viral life cycle. The small molecule PAV-104, identified through a cell-free protein synthesis and assembly screen, was recently shown to target host protein assembly machinery in a manner specific to viral assembly. In this study, we investigate the capacity of PAV-104 to inhibit SARS-CoV-2 replication in human airway epithelial cells (AECs). We show that PAV-104 inhibits >99% of infection with diverse SARS-CoV-2 variants in immortalized AECs, and in primary human AECs cultured at the air-liquid interface (ALI) to represent the lung microenvironment in vivo. Our data demonstrate that PAV-104 inhibits SARS-CoV-2 production without affecting viral entry, mRNA transcription, or protein synthesis. PAV-104 interacts with SARS-CoV-2 nucleocapsid (N) and interferes with its oligomerization, blocking particle assembly. Transcriptomic analysis reveals that PAV-104 reverses SARS-CoV-2 induction of the type-I interferon response and the maturation of nucleoprotein signaling pathway known to support coronavirus replication. Our findings suggest that PAV-104 is a promising therapeutic candidate for COVID-19 with a mechanism of action that is distinct from existing clinical management approaches.