Microglia/macrophage activation and recruitment following spinal cord injury (SCI) is associated with both detrimental and reparative functions. Stimulation of the innate immune receptor Toll-like receptor-2 (TLR2) has shown to be beneficial following SCI, and it increases axonal regeneration following optic nerve crush. However, the mechanism(s) remain unclear. As microglia express high levels of TLR2, we hypothesized that modulating the microglial response to injury using a specific TLR2 agonist, Pam3CSK4, would prevent secondary-mediated white matter degeneration following SCI. To test this hypothesis, we documented acute changes in microglia, axons, and oligodendroglia over time using two-photon excitation and an ex vivo laser-induced SCI (LiSCI) model. We utilized double transgenic mice that express GFP in either microglia or oligodendroglia, and YFP in axons, and we applied the lipophilic fluorescent dye (Nile Red) to visualize myelin. We found that treatment with Pam3CSK4 initiated one hour after injury induced a significant increase in the extent and timing of the microglial response to injury compared to vehicle controls. This enhanced response was observed 2 to 4 h following SCI and was most prominent in areas closer to the ablation site. In addition, Pam3CSK4 treatment significantly reduced axonal dieback rostral and caudal to the ablation at 6 h post-SCI. This protective effect of Pam3CSK4 was also mirrored when assessing secondary bystander axonal damage (i.e., axons spared by the primary injury that then succumb to secondary degeneration), and when assessing the survival of oligodendroglia. Following these imaging experiments, custom microarray analysis of the ex vivo spinal cord preparations revealed that Pam3CSK4-treatment induced an alternative (mixed M1:M2) microglial activation profile. In summary, our data suggest that by providing a second “sterile” activation signal to microglia through TLR2/TLR1 signaling, the microglial response to injury can be modulated in situ and is highly neuroprotective.