It has been previously demonstrated that 17beta-estradiol (E(2)) inhibits the response of microglia, the resident brain macrophages, to acute injuries in specific brain regions. We here show that the effect of E(2) in acute brain inflammation is widespread and that the hormone reduces the expression of inflammatory mediators, such as monocyte chemoattractant protein-1, macrophage inflammatory protein-2, and TNF-alpha, induced by lipopolysaccharide, demonstrating that microglia are a direct target of estrogen action in brain. Using the APP23 mice, an animal model of Alzheimer's disease reproducing chronic neuroinflammation, we demonstrate that ovary ablation increases microglia activation at beta-amyloid (Abeta) deposits and facilitates the progression of these cells toward a highly reactive state. Long-term administration of E(2) reverts the effects of ovariectomy and decreases microglia reactivity compared with control animals. In this animal model, these events do not correlate with a reduced number of Abeta deposits. Finally, we show that E(2) inhibits Abeta-induced expression of scavenger receptor-A in macrophage cells, providing a mechanism for the effect of E(2) on Abeta signaling observed in the APP23 mice. Altogether, our observations reveal a substantial involvement of endogenous estrogen in neuroinflammatory processes and provide novel mechanisms for hormone action in the brain.