Chadarevian et al. demonstrate that transplantation of human induced pluripotent stem cell (iPSC)-derived microglia can prevent and reverse diverse neuropathologies in a mouse model of adult-onset leukoencephalopathy with axonal spheroids and pigmented glia (ALSP). The study uses a xenotolerant mouse model lacking the *fms*-intrinsic regulatory element (FIRE) within *Csf1r*, which develops hallmark pathologies associated with ALSP. Transplantation of human microglial progenitors restored a homeostatic microglial signature and prevented the development of axonal spheroids, white matter abnormalities, reactive astrogliosis, and brain calcifications. CRISPR correction of ALSP-patient-derived iPSCs rescued microglial deficiencies, and transplantation of these corrected microglia reversed pre-existing neuropathology. These findings suggest that iPSC-microglia transplantation could offer a promising new therapeutic strategy for ALSP and other primary microgliopathies.Chadarevian et al. demonstrate that transplantation of human induced pluripotent stem cell (iPSC)-derived microglia can prevent and reverse diverse neuropathologies in a mouse model of adult-onset leukoencephalopathy with axonal spheroids and pigmented glia (ALSP). The study uses a xenotolerant mouse model lacking the *fms*-intrinsic regulatory element (FIRE) within *Csf1r*, which develops hallmark pathologies associated with ALSP. Transplantation of human microglial progenitors restored a homeostatic microglial signature and prevented the development of axonal spheroids, white matter abnormalities, reactive astrogliosis, and brain calcifications. CRISPR correction of ALSP-patient-derived iPSCs rescued microglial deficiencies, and transplantation of these corrected microglia reversed pre-existing neuropathology. These findings suggest that iPSC-microglia transplantation could offer a promising new therapeutic strategy for ALSP and other primary microgliopathies.