The role of microglia cells in Alzheimer's disease (AD) is well recognized, however their molecular and functional diversity remain unclear. Here, we isolated amyloid plaque-containing (using labelling with methoxy-XO4, XO4+) and non-containing (XO4-) microglia from an AD mouse model. Transcriptomics analysis identified different transcriptional trajectories in ageing and AD mice. XO4+ microglial transcriptomes demonstrated dysregulated expression of genes associated with late onset AD. We further showed that the transcriptional program associated with XO4+ microglia from mice is present in a subset of human microglia isolated from brains of individuals with AD. XO4- microglia displayed transcriptional signatures associated with accelerated ageing and contained more intracellular post-synaptic material than XO4+ microglia, despite reduced active synaptosome phagocytosis. We identified HIF1α as potentially regulating synaptosome phagocytosis in vitro using primary human microglia, and BV2 mouse microglial cells. Together, these findings provide insight into molecular mechanisms underpinning the functional diversity of microglia in AD.