Survival motor neuron (SMN) protein deficiency results in loss of alpha motor neurons and subsequent muscle atrophy in patients with spinal muscular atrophy (SMA). Reactive microglia have been reported in SMA mice and depleting microglia rescues the number of proprioceptive synapses, suggesting a role in SMA pathology. Here, we explore the contribution of lymphocytes on microglia reactivity in SMA mice and investigate how SMN deficiency alters the reactive profile of human induced pluripotent stem cell (iPSC)‐derived microglia. We show that microglia adopt a reactive morphology in spinal cords of SMA mice. Ablating lymphocytes did not alter the reactive morphology of SMA microglia and did not improve the survival or motor function of SMA mice, indicating limited impact of peripheral immune cells on the SMA phenotype. We found iPSC‐derived SMA microglia adopted an amoeboid morphology and displayed a reactive transcriptome profile, increased cell migration, and enhanced phagocytic activity. Importantly, cell morphology and electrophysiological properties of motor neurons were altered when they were incubated with conditioned media from SMA microglia. Together, these data reveal that SMN‐deficient microglia adopt a reactive profile and exhibit an exaggerated inflammatory response with potential impact on SMA neuropathology.