Alzheimer's disease (AD) is characterized by the extracellular deposition of amyloid-β (Aβ), neurofibrillary tangle formation, and a microglial-driven inflammatory response. Chronic inflammatory activation compromises microglial clearance functions. Because peroxisome proliferator-activated receptor γ (PPARγ) agonists suppress inflammatory gene expression, we tested whether activation of PPARγ would also result in improved microglial Aβ phagocytosis. The PPARγ agonist pioglitazone and a novel selective PPARα/γ modulator, DSP-8658, currently in clinical development for the treatment of type 2 diabetes, enhanced the microglial uptake of Aβ in a PPARγ-dependent manner. This PPARγ-stimulated increase of Aβ phagocytosis was mediated by the upregulation of scavenger receptor CD36 expression. In addition, combined treatment with agonists for the heterodimeric binding partners of PPARγ, the retinoid X receptors (RXRs), showed additive enhancement of the Aβ uptake that was mediated by RXRα activation. Evaluation of DSP-8658 in the amyloid precursor protein/presenilin 1 mouse model confirmed an increased microglial Aβ phagocytosis in vivo, which subsequently resulted in a reduction of cortical and hippocampal Aβ levels. Furthermore, DSP-8658-treated mice showed improved spatial memory performance. Therefore, stimulation of microglial clearance by simultaneous activation of the PPARγ/RXRα heterodimer may prove beneficial in prevention of AD.