APOE4/4 genotype is linked to the accumulation of lipid droplets in microglia of Alzheimer's disease (AD) patients. Single-nucleus RNA sequencing of brain tissue from AD patients with APOE4/4 and APOE3/3 genotypes revealed that microglia expressing the lipid droplet-associated enzyme ACSL1 are more abundant in APOE4/4 patients. In human induced pluripotent stem cell-derived microglia, fibrillar Aβ induces ACSL1 expression, triglyceride synthesis, and lipid droplet accumulation in an APOE-dependent manner. Conditioned media from lipid droplet-containing microglia lead to Tau phosphorylation and neurotoxicity in an APOE-dependent manner. These findings suggest a link between genetic risk factors for AD and microglial lipid droplet accumulation and neurotoxic microglial factors, potentially offering therapeutic strategies for AD. Alzheimer's original description of AD included the identification of "many glial cells showing adipose saccules" in AD brains. The glial-lipid hallmark of AD has received little attention in AD research. Recent meta-analyses of genetic risk factors for AD identified genes involved in lipid processing and innate immunity as statistically enriched categories. APOE is a lipid-related AD risk gene, highly upregulated in human microglia in AD. Human iPS cell-derived microglia with APOE risk variants have more lipid droplets. Aged mouse microglia accumulate lipid droplets and exhibit a dysfunctional microglial state termed LD-accumulating microglia (LDAM). LDAM were also observed in chimaeric human-mouse AD models. LDs form in myeloid cells through the upregulation of lipid-synthesis enzymes triggered by innate immune triggers. LDs have antimicrobial properties and are an evolutionarily conserved form of innate immune defense in macrophages. Cholesterol-rich lysosomes and LDs in dysfunctional microglia have been observed in demyelination mouse models and human iPS cell models. The study identified a microglial state defined by the expression of the lipid droplet-associated enzyme ACSL1, which is more abundant in AD-APOE4/4 patients. ACSL1 is a key enzyme in LD biogenesis and overexpression of ACSL1 induces triglyceride-specific LD formation. ACSL1 was upregulated specifically in microglia in AD brain tissue compared to controls and to a greater extent in APOE4/4 compared to AD-APOE3/3 microglia. Subclustering revealed that ACSL1+ microglia constitute a distinct state from homeostatic and disease-associated microglia. These cells are referred to as LDAM. AD-APOE4/4 brain tissue has the greatest percentage of LDAM, followed by AD-APOE3/3 and the least amount ofAPOE4/4 genotype is linked to the accumulation of lipid droplets in microglia of Alzheimer's disease (AD) patients. Single-nucleus RNA sequencing of brain tissue from AD patients with APOE4/4 and APOE3/3 genotypes revealed that microglia expressing the lipid droplet-associated enzyme ACSL1 are more abundant in APOE4/4 patients. In human induced pluripotent stem cell-derived microglia, fibrillar Aβ induces ACSL1 expression, triglyceride synthesis, and lipid droplet accumulation in an APOE-dependent manner. Conditioned media from lipid droplet-containing microglia lead to Tau phosphorylation and neurotoxicity in an APOE-dependent manner. These findings suggest a link between genetic risk factors for AD and microglial lipid droplet accumulation and neurotoxic microglial factors, potentially offering therapeutic strategies for AD. Alzheimer's original description of AD included the identification of "many glial cells showing adipose saccules" in AD brains. The glial-lipid hallmark of AD has received little attention in AD research. Recent meta-analyses of genetic risk factors for AD identified genes involved in lipid processing and innate immunity as statistically enriched categories. APOE is a lipid-related AD risk gene, highly upregulated in human microglia in AD. Human iPS cell-derived microglia with APOE risk variants have more lipid droplets. Aged mouse microglia accumulate lipid droplets and exhibit a dysfunctional microglial state termed LD-accumulating microglia (LDAM). LDAM were also observed in chimaeric human-mouse AD models. LDs form in myeloid cells through the upregulation of lipid-synthesis enzymes triggered by innate immune triggers. LDs have antimicrobial properties and are an evolutionarily conserved form of innate immune defense in macrophages. Cholesterol-rich lysosomes and LDs in dysfunctional microglia have been observed in demyelination mouse models and human iPS cell models. The study identified a microglial state defined by the expression of the lipid droplet-associated enzyme ACSL1, which is more abundant in AD-APOE4/4 patients. ACSL1 is a key enzyme in LD biogenesis and overexpression of ACSL1 induces triglyceride-specific LD formation. ACSL1 was upregulated specifically in microglia in AD brain tissue compared to controls and to a greater extent in APOE4/4 compared to AD-APOE3/3 microglia. Subclustering revealed that ACSL1+ microglia constitute a distinct state from homeostatic and disease-associated microglia. These cells are referred to as LDAM. AD-APOE4/4 brain tissue has the greatest percentage of LDAM, followed by AD-APOE3/3 and the least amount of