In addition to the well-established effects of air pollution on the cardiovascular and respiratory systems, emerging evidence has implicated it in inducing negative effects on the central nervous system. Diesel exhaust particulate matter (DEP), a major component of air pollution, is a complex mixture of numerous toxicants. Limited studies have shown that DEP-induced dopaminergic neuron dysfunction is mediated by microglia, the resident immune cells of the brain. Here we show that mouse microglia similarly mediate primary cerebellar granule neuron (CGN) death in vitro. While DEP (0, 25, 50, 100 μg/2 cm2) had no effect on CGN viability after 24 h of treatment, in the presence of primary cortical microglia neuronal cell death increased by 2–3-fold after co-treatment with DEP, suggesting that microglia are important contributors to DEP-induced CGN neurotoxicity. DEP (50 μg/2 cm2) treatment of primary microglia for 24 h resulted in morphological changes indicative of microglia activation, suggesting that DEP may induce the release of cytotoxic factors. Microglia-conditioned medium after 24 h treatment with DEP, was also toxic to CGNs. DEP caused a significant increase in reactive oxygen species in microglia, however, antioxidants failed to protect neurons from DEP/microglia-induced toxicity. DEP increased mRNA levels of the pro-inflammatory cytokines IL-6 and IL1-β, and the release of IL-6. The antibiotic minocycline (50 μM) and the peroxisome proliferator-activated receptor-γ agonist pioglitazone (50 μM) attenuated DEP-induced CGN death in the co-culture system. Microglia and CGNs from male mice appeared to be somewhat more susceptible to DEP neurotoxicity than cells from female mice possibly because of lower paraoxonase-2 expression. Together, these results suggest that microglia-induced neuroinflammation may play a critical role in modulating the effect of DEP on neuronal viability.