Severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) causes COVID-19, a highly transmissible acute respiratory infection that can result in severe pneumonia and death. Many details of SARS-CoV-2 infection are not fully understood, including the cell biology and host-virus interactions involved in coronavirus assembly and release, in which the Envelope (E) structural protein is instrumental. Deletion of E in other coronaviruses has been shown previously to either attenuate or abrogate infection. To determine the role of E on SARS-CoV-2 virus production and infectivity, we produced reporter SARS-CoV-2 with or without the E gene deleted using a bacterial artificial chromosome. Replication of ΔE SARS-CoV-2 was attenuated in Vero E6 cells expressing human ACE2 and TMPRSS2 and in human epithelial cell lines. Electron and immunofluorescence microscopy and virology assays showed that ΔE SARS-CoV-2 increased cell surface expression of Spike (S) glycoprotein, leading to reduced S incorporation into ΔE SARS-CoV-2 particles and promotion of increased cell-to-cell transmission that evades neutralizing antibody inhibition. Trans-complementation of E partially rescued ΔE SARS-CoV-2 S incorporation and restored cell-free transmission. In addition to validating the role of E in retention of S in the ER-Golgi intermediate complex (ERGIC), our results showed that a lack of E led to reorganization of the ERGIC during SARS-CoV-2 infection. Improved understanding of E in SARS-CoV-2 replication and host pathogenesis may help development of novel therapeutics.