Microglia are resident inflammatory cells of the CNS and have important roles in development, homeostasis and a variety of neurologic and psychiatric diseases. Difficulties in procuring human microglia have limited their study and hampered the clinical translation of microglia-based treatments shown to be effective in animal disease models. Here we report the differentiation of human induced pluripotent stem cells (iPSC) into microglia-like cells by exposure to defined factors and co-culture with astrocytes. These iPSC-derived microglia have the phenotype, gene expression profile and functional properties of brain-isolated microglia. Murine iPSC-derived microglia generated using a similar protocol have equivalent efficacy to primary brain-isolated microglia in treatment of murine syngeneic intracranial malignant gliomas. The ability to generate human microglia facilitates the further study of this important CNS cell type and raises the possibility of their use in personalized medicine applications.