The rapid evolution of SARS-CoV-2 and other respiratory RNA viruses limits the success of current vaccines and antibody-based therapies. Engineered decoy receptors based on soluble angiotensin-converting enzyme 2 (sACE2) offer promising alternatives but show limited clinical success. This study conducted functional and mechanistic analyses using an optimized sACE2 mutant fused to human IgG1 Fc (B5-D3) as a representative, revealing redirection of virus–decoy complexes from epithelial infection to lysosomal degradation in phagocytes beyond viral neutralization. Intranasal prophylactic delivery of B5-D3 confers complete protection in SARS-CoV-2-infected K18-hACE2 mice, regardless of age. Abrogation of Fc effector functions compromises antiviral protection, indicating that Fc-mediated uptake of virus–decoy complexes is critical. Transcriptomic analysis suggests that B5-D3 induces early immune activation in the lungs of infected mice. Bio-distribution and flow cytometry reveal selective ta