The founder of Virgin Atlantic said if the UK cut ties with the EU, it would be a "very, very, very, very sad day".
"I think it would be the start of most likely the breakup of the European Union,” he added.
Branson also told Sky News he believed a Brexit “would be very, very damaging for Great Britain”.
He added that he hoped “sense prevails” when it comes to the referendum.
Branson highlighted the fact that there had not been any wars within the EU bloc since World War Two.
"The European Union has managed to avoid any wars within the European Union since the Second World War," he said.
"In the Second World War, my father fought again the Germans. In the First World War, my grandfather fought, my great-grandfather fought 20 years before that.
"I mean having the European Union there are just so many benefits and I just hope sense will prevail when it comes to having the vote on it."
However Branson added that he was “"a bit distracted with space" at the moment.
Branson was speaking in Mojave, California, where he was set to unveil the Virgin Galactic SpaceShip Two which has been designed to carry passengers into the edges of space.
Branson: A Brexit would be 'very very damaging for Great Britain'
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