Converging lines of evidence indicate dysregulation of the key immunoregulatory molecule CD45 (also known as leukocyte common antigen) in Alzheimer's disease (AD). We report that transgenic mice overproducing amyloid- peptide (A) but deficient in CD45 (PSAPP/CD45Ϫ/Ϫ mice) faithfully recapitulate AD neuropathology. Specifically, we find increased abundance of cerebral intracellular and extracellular soluble oligomeric and insoluble A, decreased plasma soluble A, increased abundance of microglial neurotoxic cytokines tumor necrosis factor-␣ and interleukin-1, and neuronal loss in PSAPP/CD45 Ϫ/Ϫ mice compared with CD45-sufficient PSAPP littermates (bearing mutant human amyloid precursor protein and mutant human presenilin-1 transgenes). After CD45 ablation, in vitro and in vivo studies demonstrate an anti-A phagocytic but proinflammatory microglial phenotype. This form of microglial activation occurs with elevated A oligomers and neural injury and loss as determined by decreased ratio of anti-apoptotic Bcl-xL to proapoptotic Bax, increased activated caspase-3, mitochondrial dysfunction, and loss of cortical neurons in PSAPP/CD45 Ϫ/Ϫ mice. These data show that deficiency in CD45 activity leads to brain accumulation of neurotoxic A oligomers and validate CD45-mediated microglial clearance of oligomeric A as a novel AD therapeutic target.