Effective therapies are urgently needed for COVID-19. Here we describe the identification of a new stable human immunoglobulin G1 heavy-chain variable (VH) domain scaffold that was used for the construction of a large library, lCAT6, of engineered human VHs. This library was panned against the receptor-binding domain (RBD) of the SARS-CoV-2 spike (S) glycoprotein. Two VH domains (VH ab6 and VH m397) were selected and fused to Fc for increased half-life in circulation. The VH-Fc ab6 and m397 specifically neutralized SARS-CoV-2 with high potencies (50% neutralization at 0.35 µg/ml and 1.5 µg/ml, respectively) as measured by two independent replication-competent virus neutralization assays. Ab6 and m397 competed with ACE2 for binding to RBD, suggesting a competitive mechanism of virus neutralization. These VH domains may have potential applications for prophylaxis and therapy of COVID-19 alone or in combination, as well as for diagnosis and as tools for research.