Microglia, the resident immune cells of the CNS, are normally quiescent but become activated after infection or injury. Their properties then change, and they promote both repair and damage processes. The extent of microglial activation is regulated, in part, by activation-induced cell death (AICD). Although many apoptotic aspects of the microglial AICD mechanism have been elucidated, little is known about the connection between the activation step and the death process. Using mouse primary microglial cultures, we show that the ectoenzyme CD38, via its calcium-mobilizing metabolite cyclic-ADP-ribose (cADPR), helps promote microglial activation and AICD induced by LPS plus IFN-gamma (LPS/IFN-gamma), suggesting that CD38 links the two processes. Accordingly, CD38 expression and activity, as well as the intracellular calcium concentration ([Ca2+]i) in the primary microglia were increased by LPS/IFN-gamma treatment. Moreover, CD38 deficiency or treatment with cADPR antagonists conferred partial resistance to LPS/IFN-gamma-induced AICD and also reduced [Ca2+]i. Microglial activation, indicated by induced expression of NO synthase-2 mRNA and production of NO, secretion and mRNA expression of TNF-alpha and IL-12 p40, and expression of IL-6 mRNA, was attenuated by CD38 deficiency or cADPR-antagonist treatment. The observed effects of CD38 on microglial activation are probably mediated via a cADPR-dependent increase in [Ca2+]i and the effect on AICD by regulation of NO production. Our results thus suggest that CD38 significantly affects regulation of the amount and function of activated microglia, with important consequences for injury and repair processes in the brain.