Meningeal inflammation strongly associates with demyelination and neuronal loss in the underlying cortex of progressive MS patients, contributing to clinical disability. However, the pathological mechanisms of meningeal inflammation-induced cortical pathology are still largely elusive. Using extensive analysis of human post-mortem tissue, we identified two distinct microglial phenotypes, termed MS1 and MS2, in the cortex of progressive MS patients. These phenotypes differed in morphology and protein expression, but both associated with inflammation of the overlying meninges. We could replicate the MS-specific microglial phenotypes in a novel in vivo rat model for progressive MS-like meningeal inflammation, with microglia present at 1 month post-induction resembling MS1 microglia whereas those at 2 months acquired an MS2-like phenotype. Interestingly, MS1 microglia were involved in presynaptic displacement and phagocytosis and associated with a relative sparing of neurons in the MS and animal cortex. In contrast, the presence of MS2 microglia coincided with substantial neuronal loss. Taken together, we uncovered that in response to meningeal inflammation, microglia acquire two distinct phenotypes that differentially associate with neurodegeneration in the progressive MS cortex. Our data suggests that these phenotypes occur sequentially and that microglia may lose their protective properties over time, contributing to neuronal loss.