Alzheimer's disease (AD) is a detrimental neurodegenerative disease with no effective treatments. Due to cellular heterogeneity, defining the roles of immune cell subsets in AD onset and progression has been challenging. Using transcriptional single-cell sorting, we comprehensively map all immune populations in wild-type and AD-transgenic (Tg-AD) mouse brains. We describe a novel microglia type associated with neurodegenerative diseases (DAM) and identify markers, spatial localization, and pathways associated with these cells. Immunohistochemical staining of mice and human brain slices shows DAM with intracellular/phagocytic Aβ particles. Single-cell analysis of DAM in Tg-AD and triggering receptor expressed on myeloid cells 2 (Trem2)-/- Tg-AD reveals that the DAM program is activated in a two-step process. Activation is initiated in a Trem2-independent manner that involves downregulation of microglia checkpoints, followed by activation of a Trem2-dependent program. This unique microglia-type has the potential to restrict neurodegeneration, which may have important implications for future treatment of AD and other neurodegenerative diseases. VIDEO ABSTRACT.