Inflammation has been argued to play a fundamental role in the pathogenesis of Alzheimer's disease. Mice transgenic for mutant human amyloid precursor protein (APP) develop progressive amyloid deposition, gliosis, and cognitive impairment. Paradoxically, intracranial administration of lipopolysaccharide (LPS) to promote neuroinflammation results in a reduction in amyloid-beta peptide (Abeta) burden concurrent with the inflammatory response. To determine whether microglia mediate Abeta clearance after LPS, we used dexamethasone to inhibit the microglial response. Amyloid precursor protein mice were injected intrahippocampally with either LPS or saline and were allowed to survive for 7 days with or without dexamethasone cotreatment. Brain tissue was then analyzed by immunohistochemistry. Hippocampal Abeta burden was reduced 7 days after LPS injection, and this was prevented by cotreatment with dexamethasone. Markers of microglial activation [CD45, complement receptor 3 (CR3), and macrosialin (CD68)] were increased by LPS, and these increases were attenuated by dexamethasone. Dexamethasone failed to block LPS-induced increases in all microglial markers, and Fcgamma receptors II/III and scavenger receptor A were increased by LPS but were unaffected by dexamethasone cotreatment. These results indicate a complex response by microglia to acute LPS treatment, with only some responses sensitive to steroidal anti-inflammatory drug treatment. Nonetheless, microglial activation was necessary to remove Abeta in this model of neuroinflammation.