Microglia undergo dynamic structural and transcriptional changes during the immune response to traumatic brain injury (TBI). For example, TBI causes microglia to form rod‐shaped trains in the cerebral cortex, but their contribution to inflammation and pathophysiology is unclear. The purpose of this study was to determine the origin and alignment of rod microglia and to determine the role of microglia in propagating persistent cortical inflammation. Here, diffuse TBI in mice was modeled by midline fluid percussion injury (FPI). Bone marrow chimerism and BrdU pulse‐chase experiments revealed that rod microglia derived from resident microglia with limited proliferation. Novel data also show that TBI‐induced rod microglia were proximal to axotomized neurons, spatially overlapped with dense astrogliosis, and aligned with apical pyramidal dendrites. Furthermore, rod microglia formed adjacent to hypertrophied microglia, which clustered among layer V pyramidal neurons. To better understand the contribution of microglia to cortical inflammation and injury, microglia were eliminated prior to TBI by CSF1R antagonism (PLX5622). Microglial elimination did not affect cortical neuron axotomy induced by TBI, but attenuated rod microglial formation and astrogliosis. Analysis of 262 immune genes revealed that TBI caused profound cortical inflammation acutely (8 hr) that progressed in nature and complexity by 7 dpi. For instance, gene expression related to complement, phagocytosis, toll‐like receptor signaling, and interferon response were increased 7 dpi. Critically, these acute and chronic inflammatory responses were prevented by microglial elimination. Taken together, TBI‐induced neuronal injury causes microglia to structurally associate with neurons, augment astrogliosis, and propagate diverse and persistent inflammatory/immune signaling pathways.