Microglia regulate brain development through many processes, such as promoting neurogenesis, supporting cell survival, and phagocytizing progenitor, newly-born, and dying cells. Many of these same developmental processes show robust sex differences, yet very few studies have assessed sex differences in microglia function during development. Hormonally-induced sexual differentiation of the brain occurs during the perinatal period, thus we examined sex differences in microglial morphology, phagocytosis, and proliferation in the hippocampus during the early postnatal period. We found that the neonatal female hippocampus had significantly more microglia with phagocytic cups than the male hippocampus. We subsequently found that female microglia phagocytized more neural progenitor cells and healthy cells compared to males, but there were no sex differences in the number of newly-born or dying cells targeted by microglial phagocytosis. We found that the number of phagocytic microglia in females was reduced to male-typical levels by treatment with estradiol, the hormone responsible for masculinizing the rodent brain. Females also had higher expression of several phagocytic pathway genes in the hippocampus compared to males. In contrast to robust sex differences in phagocytic microglia, we found no sex differences in the number of microglia with amoeboid, transitioning, or ramified morphologies or differences in three-dimensional reconstructions of microglial morphology. While we did not find a baseline sex difference in microglial proliferation during or following the prenatal gonadal hormone surge in males, we found that estradiol treatment increased microglia proliferation in females. Overall, these data show that there are important sex differences in microglia function in the hippocampus during the early neonatal period.