SARS-CoV-2, like many viruses, generates syncytia. Using SARS-CoV-2 and Spike (S) expressing recombinant vesicular stomatitis and influenza A viruses, we show that S-mediated syncytia formation provides resistance to interferons in cultured cells, human small airway-derived air-liquid interface cultures and hACE2 transgenic mice. Amino acid substitutions that modulate fusogenicity in Delta- and Omicron-derived S have parallel effects on viral interferon resistance. Syncytia formation also decreases antibody virus neutralization activity in cultured cells. These findings explain the continued selection of fusogenic variants during SARS-CoV-2 evolution in humans and, more generally, the evolution of fusogenic viruses despite the adverse effects of syncytia formation on viral replication in the absence of innate or adaptive immune pressure.