Aims: Amyotrophic lateral sclerosis (ALS) is a multifactorial neurodegenerative disease characterised by the loss of upper and lower motor neurons. Neuroinflammation mediated by microglial activation is evident in post-mortem brain tissues, and in brain imaging of patients with ALS. However, the exact role of microglia in ALS remains to be elucidated partly due to the lack of an accurate microglial model system that is able to recapitulate the clinical pathology of ALS. Moreover, direct sampling of microglia from patients with ALS is not feasible, further limiting the study of microglial function in ALS. To address this shortcoming, we describe an approach that generates monocyte-derived microglia (MDMi) that are capable of expressing molecular markers, and functional characteristics similar to resident human brain microglia. Importantly, MDMi can be routinely and reproducibly generated from ALS patient blood, and reveal patient heterogeneity associated with age, sex and disease subgroup. Methods: MDMi were successfully established from all 30 ALS patients, including 15 patients with slow disease progression, 6 with intermediate progression, and 9 with rapid progression, together with 20 non-affected heathy controls (HC). Results: Our ALS MDMi model recapitulated canonical pathological features of ALS including non-phosphorylated and phosphorylated-TDP-43-positive pathological inclusions. We further observed significantly impaired phagocytosis, altered cytokine expression and microglial morphology, as well as elevated DNA damage in ALS compared to HC MDMi. Abnormal phagocytosis was observed in all ALS cases, and was correlated to the progression of disease. Moreover, in-depth analysis of individual microglia revealed cell-specific variation in phagocytic function that was significantly altered, and exacerbated in rapid disease progression. Conclusions: Our approach enabled us to generate ALS patient microglia from peripheral blood samples using a rapid, robust, cost-effective, and reproducible protocol. We have shown that ALS monocyte-derived microglia have significantly altered functional behaviour compared to age-matched HCs, with a major deficit in phagocytic activity. This is also the first demonstration of abnormal TDP-43 localisation in microglia grown from ALS patients. Overall, this approach is highly applicable to monitor disease progression and can be applied as a functional readout in clinical trials for anti-neuroinflammatory agents. Additionally, this model system can be used as a basis for personalised therapeutic treatment for ALS, as well as other neurodegenerative diseases.