Microglia play a critical role in brain homeostasis and disease progression. In neurodegenerative conditions, microglia acquire the neurodegenerative phenotype (MGnD), whose function is poorly understood. MicroRNA-155 (miR-155), enriched in immune cells, critically regulates MGnD. However, its role in Alzheimer's disease (AD) pathogenesis remains unclear. Here, we report that microglial deletion of miR-155 induces a pre-MGnD activation state via interferon-γ (IFN-γ) signaling, and blocking IFN-γ signaling attenuates MGnD induction and microglial phagocytosis. Single-cell RNA-sequencing analysis of microglia from an AD mouse model identifies Stat1 and Clec2d as pre-MGnD markers. This phenotypic transition enhances amyloid plaque compaction, reduces dystrophic neurites, attenuates plaque-associated synaptic degradation and improves cognition. Our study demonstrates a miR-155-mediated regulatory mechanism of MGnD and the beneficial role of IFN-γ-responsive pre-MGnD in restricting neurodegenerative pathology and preserving cognitive function in an AD mouse model, highlighting miR-155 and IFN-γ as potential therapeutic targets for AD.