γ-Secretase is an intramembrane cleaving protease involved in the generation of the Alzheimer's disease (AD)-associated amyloid β peptide (Aβ). γ-Secretase is ubiquitously expressed in different organs, and also in different cell types of the human brain. Besides the involvement in the proteolytic generation of Aβ from the amyloid precursor protein, γ-secretase cleaves many additional protein substrates, suggesting pleiotropic functions under physiological and pathophysiological conditions. Microglia exert important functions during brain development and homeostasis in adulthood, and accumulating evidence indicates that microglia and neuroinflammatory processes contribute to the pathogenesis of neurodegenerative diseases. Recent studies demonstrate functional implications of γ-secretase in microglia, suggesting that alterations in γ-secretase activity could contribute to AD pathogenesis by modulation of microglia and related neuroinflammatory processes during neurodegeneration. In this review, we discuss the involvement of γ-secretase in the regulation of microglial functions, and the potential relevance of these processes under physiological and pathophysiological conditions.