Microglia are the resident macrophages of the central nervous system (CNS). Gene expression profiling has identified Sall1, which encodes a transcriptional regulator, as a microglial signature gene. We found that Sall1 was expressed by microglia but not by other members of the mononuclear phagocyte system or by other CNS-resident cells. Using Sall1 for microglia-specific gene targeting, we found that the cytokine receptor CSF1R was involved in the maintenance of adult microglia and that the receptor for the cytokine TGF-β suppressed activation of microglia. We then used the microglia-specific expression of Sall1 to inducibly inactivate the murine Sall1 locus in vivo, which resulted in the conversion of microglia from resting tissue macrophages into inflammatory phagocytes, leading to altered neurogenesis and disturbed tissue homeostasis. Collectively, our results show that transcriptional regulation by Sall1 maintains microglial identity and physiological properties in the CNS and allows microglia-specific manipulation in vivo.