Loss‐of‐function variants of triggering receptor expressed on myeloid cells 2 (TREM2) increase the risk of developing Alzheimer's disease (AD). The mechanism through which TREM2 contributes to the disease (TREM2 activation vs inactivation) is largely unknown. Here, we analyzed changes in a gene set downstream of TREM2 to determine whether TREM2 signaling is modified by AD progression. We generated an anti‐human TREM2 agonistic antibody and defined TREM2 activation in terms of the downstream expression changes induced by this antibody in microglia developed from human induced pluripotent stem cells (iPSC). Differentially expressed genes (DEGs) following TREM2 activation were compared with the gene set extracted from microglial single nuclear RNA sequencing data of patients with AD, using gene set enrichment analysis. We isolated an anti‐TREM2‐specific agonistic antibody, Hyb87, from anti‐human TREM2 antibodies generated using binding and agonism assays, which helped us identify 300 upregulated and 251 downregulated DEGs. Pathway enrichment analysis suggested that TREM2 activation may be associated with Th2‐related pathways. TREM2 activation was lower in AD microglia than in microglia from healthy subjects or patients with mild cognitive impairment. TREM2 activation also showed a significant negative correlation with disease progression. Pathway enrichment analysis of DEGs controlled by TREM2 activity indicated that TREM2 activation in AD may lead to anti‐apoptotic signaling, immune response, and cytoskeletal changes in the microglia. We showed that TREM2 activation decreases with AD progression, in support of a protective role of TREM2 activation in AD. In addition, the agonistic anti‐TREM2 antibody can be used to identify TREM2 activation state in AD microglia.