Dimethyl fumarate (DMF), recently approved as an oral immunomodulatory treatment for relapsing-remitting multiple sclerosis (MS), metabolizes to monomethyl fumarate (MMF) which crosses the blood-brain barrier and has demonstrated neuroprotective effects in experimental studies. We postulated that MMF exerts neuroprotective effects through modulation of microglia activation, a critical component of the neuroinflammatory cascade that occurs in neurodegenerative diseases such as MS. To ascertain our hypothesis and define the mechanistic pathways involved in the modulating effect of fumarates, we used real-time PCR and biochemical assays to assess changes in the molecular and functional phenotype of microglia, quantitative Western blotting to monitor activation of postulated pathway components, and ex vivo whole-cell patch clamp recording of excitatory post-synaptic currents in corticostriatal slices from mice with experimental autoimmune encephalomyelitis (EAE), a model for MS, to study synaptic transmission. We show that exposure to MMF switches the molecular and functional phenotype of activated microglia from classically activated, pro-inflammatory type to alternatively activated, neuroprotective one, through activation of the hydroxycarboxylic acid receptor 2 (HCAR2). We validate a downstream pathway mediated through the AMPK-Sirt1 axis resulting in deacetylation, and thereby inhibition, of NF-κB and, consequently, of secretion of pro-inflammatory molecules. We demonstrate through ex vivo monitoring of spontaneous glutamate-mediated excitatory post-synaptic currents of single neurons in corticostriatal slices from EAE mice that the neuroprotective effect of DMF was exerted on neurons at pre-synaptic terminals by modulating glutamate release. By exposing control slices to untreated and MMF-treated activated microglia, we confirm the modulating effect of MMF on microglia function and, thereby, its indirect neuroprotective effect at post-synaptic level. These findings, whereby DMF-induced activation of a new HCAR2-dependent pathway on microglia leads to the modulation of neuroinflammation and restores synaptic alterations occurring in EAE, represent a possible novel mechanism of action for DMF in MS.