One hundred and fifty years have elapsed since the original discovery of the microglial cell by Virchow. While this cell type has been well studied, the role of microglia in the pathology of many central nervous system diseases still remains enigmatic. It is widely accepted that microglial-mediated inflammation contributes to the progression of Alzheimer's disease (AD); however, the precise mechanisms through which these cells contribute to AD-related inflammation remains to be elucidated. In the AD brain, microglial cells are found in close association with amyloid beta (Abeta) deposits. Histological examination of AD brains as well as cell culture studies have shown that the interaction of microglia with fibrillar Abeta leads to their phenotypic activation. The conversion of these cells into a classically 'activated' phenotype results in production of chemokines, neurotoxic cytokines and reactive oxygen and nitrogen species that are deleterious to the CNS. However, microglia also exert a neuroprotective role through their ability to phagocytose Abeta particles and clear soluble forms of Abeta. These cells have been documented to play integral roles in tissue repair and inflammation, and in recent years it has been appreciated that this cell type is capable of facilitating a more complex response to pathogens by changing their activation status. A variety of new findings indicate that their role in the central nervous system is far more complex than previously appreciated. In this review we discuss the role of microglia in the normal brain and their phenotypic heterogeneity and how this may play a role in AD-related pathophysiology. We touch on what is known about their ability to recognize and clear Abeta peptides as well as more controversial topics, including various activation states of microglia and the ability of peripheral macrophages or monocytes to infiltrate the brain.