Innate immunity is a rapid series of reactions to pathogens, cell injuries and toxic proteins. A key component of this natural response is the production of inflammatory mediators by resident microglia and infiltrating macrophages. There is accumulating evidence that inflammation contributes to acute injuries and more chronic CNS diseases, though other studies have shown that inhibition of microglia is, in contrast, associated with more damages or less repair. The controversies regarding the neuroprotective and neurodegenerative properties of microglia may depend on the experimental approaches. Neurotoxic substances are frequently used to produce animal models of acute injuries or diseases and they may activate microglia either directly or indirectly by their ability to cause neuronal death and demyelination. Whether microglia and the immune response play a direct role in such processes still remains an open question. On the other hand, there are data supporting the role of resident microglia and those derived from the bone marrow in the stimulation of myelin repair, removal of toxic proteins from the CNS and the prevention of neurodegeneration in chronic brain diseases. The ability of glucocorticoids to provide a negative feedback on nuclear factor kappa B pathways in microglia may be a determinant mechanism underlying the ultimate fate of the inflammatory response in the CNS. This review presents new concepts regarding the neuroprotective role of the innate immune response in the brain and how microglia can be directed to improve recovery after injuries and prevent/delay neurodegeneration.