We theoretically study Fano resonance in a two-level quantum dot side-coupled to two leads, which are connected by a direct channel. The resonance line shape is found to be deformed, from the conventional Fano form, by interlevel Coulomb interaction and interlevel interference. We derive the connection between the line-shape deformation and the interaction-induced nonmonotonicity of level occupation, which may be useful for experimental study. The dependence of the line shape on the transmission of the direct channel and on the dot-lead coupling matrix elements is discussed.