Abnormal accumulation of β-amyloid (Aβ) peptides is a culprit in Alzheimer's disease (AD); blocking Aβ generation is therefore being explored as a logical approach for AD treatment. Here, we demonstrate that targeted inhibition of β-site amyloid precursor protein (APP) cleaving enzyme-1 (BACE-1) in microglia has unique advantages. When Bace-1 was deleted in Alzheimer's 5xFAD microglia, fewer amyloid plaques developed, and this reduction was not due to changes in APP processing but rather to enhanced Aβ clearance, in line with the increase in a microglial gene signature favoring phagocytosis. Moreover, deletion of Bace-1 in microglia enhances functions of autophagolysosomes and Aβ-induced metabolic reprogramming necessary for Aβ degradation by favoring phosphorylation of mammalian target of rapamycin complex (mTOR) at Ser2448 and modulating the PI3K-mTOR-HIF-1α signaling pathways. Mice with deletion of Bace-1 in microglia showed no reduction in long-term potentiation, unlike global deletion of Bace-1. Our results suggest that targeted inhibition of BACE-1 in microglia is a superior strategy for AD treatment.