Microglial activation worsens neuronal loss and contributes to progressive neurological diseases like Parkinson's disease (PD). This inflammatory progression is countered by dynorphin (Dyn), the endogenous ligand of the kappa-opioid receptor (KOR). We show that microglial β-arrestin mediates the ability of Dyn/KOR to limit endotoxin-elicited production of pro-inflammatory effectors and cytokines, subsequently protecting neurons from inflammation-induced neurotoxicity. Agonist-activated KOR enhances the interaction of β-arrestin2 with transforming growth factor-beta-activated kinase 1 (TAK1)-binding protein 1 (TAB1), disrupting TAK1-TAB1 mediated pro-inflammatory gene expression. We reveal a new physiological role for β-arrestin in neuroprotection via receptor internalization-triggered blockade of signal effectors of microglial inflammatory neurotoxicity. This result offers novel drug targets in the convergent KOR/β-arrestin2 and inflammatory pathways for treating microglial inflammatory neuropathologies like PD.