Innate immunity and inflammatory response plays an important role in the pathogenesis of Alzheimer's disease (AD). As the major resident immune cells in the brain, microglial cells constantly survey the microenvironment and are activated by and recruited to senile plaques. Subsequently, they can phagocytose amyloid-β (Aβ) and secrete pro-inflammatory cytokines that influence the surrounding brain tissue. Recently, a wealth of information linking the microglia-specific activation of NLRP3 inflammasome to AD pathogenesis has emerged. We review here the activation mechanisms of NLRP3 inflammasome in microglia and several downstream effects in the brain, demonstrating that toxic Aβ peptide can light a fire in NLRP3 inflammasome and eventually induce AD pathology and tissue damage. More importantly, it has been demonstrated that inhibition of NLRP3 could largely protect from memory loss and decrease Aβ deposition in AD transgenic mouse model. So, we further discuss the recent advances and challenges in targeting NLRP3 inflammasome for AD therapy.