The signal regulatory protein-beta1 (SIRPbeta1) is a DAP12-associated transmembrane receptor expressed in a subset of hematopoietic cells. Recently, it was shown that peritoneal macrophages express SIRPbeta1, which positively regulated phagocytosis. Here, we found that SIRPbeta1 was up-regulated and acted as a phagocytic receptor on microglia in amyloid precursor protein J20 (APP/J20) transgenic mice and in Alzheimer's disease (AD) patients. Interferon (IFN)-gamma and IFN-beta stimulated gene transcription of SIRPbeta1 in cultured microglia. Activation of SIRPbeta1 on cultured microglia by cross-linking antibodies induced reorganization of the cytoskeleton protein beta-actin and suppressed lipopolysaccharide-induced gene transcription of tumor necrosis factor-alpha and nitric oxide synthase-2. Furthermore, activation of SIRPbeta1 increased phagocytosis of microsphere beads, neural debris, and fibrillary amyloid-beta (Abeta). Phagocytosis of neural cell debris and Abeta was impaired after lentiviral knockdown of SIRPbeta1 in primary microglial cells. Thus, SIRPbeta1 is a novel IFN-induced microglial receptor that supports clearance of neural debris and Abeta aggregates by stimulating phagocytosis.