Phospholipase C-gamma 2 (PLCγ2) is highly expressed in hematopoietic and immune cells, where it is a key signalling node enabling diverse cellular functions. Within the periphery, gain-of-function (GOF) PLCγ2 variants, such as the strongly hypermorphic S707Y, cause severe immune dysregulation. The milder hypermorphic mutation PLCγ2 P522R increases longevity and confers protection in central nervous system (CNS) neurodegenerative disorders, implicating PLCγ2 as a novel therapeutic target for treating these CNS indications. Currently, nothing is known about what consequences strong PLCγ2 GOF has on CNS functionality, and more precisely on the specific biological functions of microglia. Using the PLCγ2 S707Y variant as a model of chronic activation we investigated the functional consequences of strong PLCγ2 GOF on human microglia. PLCγ2 S707Y expressing human inducible pluripotent stem cells (hiPSC)-derived microglia exhibited hypermorphic enzymatic activity under both basal and stimulated conditions, compared to PLCγ2 wild type. Despite the increase in PLCγ2 enzymatic activity, the PLCγ2 S707Y hiPSC-derived microglia display diminished functionality for key microglial processes including phagocytosis and cytokine secretion upon inflammatory challenge. RNA sequencing revealed a downregulation of genes related to innate immunity and response, providing molecular support for the phenotype observed. Our data suggests that chronic activation of PLCγ2 elicits a detrimental phenotype that is contributing to unfavourable CNS functions, and informs on the therapeutic window for targeting PLCγ2 in the CNS. Drug candidates targeting PLCγ2 will need to precisely mimic the effects of the PLCγ2 P522R variant on microglial function, but not those of the PLCγ2 S707Y variant.HighlightsThe impact of strongly hypermorphic variants of PLCγ2 have not been studied in brain and yet PLCγ2 is implicated in modifying risk of CNS disorders including Alzheimer’s diseaseTo address this, we explored the role of the strongly hypermorphic PLCγ2 S707Y variant in hiPSC-derived microgliaS707Y increases PLCγ2 enzymatic activity and intracellular calcium fluxPhagocytosis and cytokine production are diminished in PLCγ2 S707Y microgliaPLCγ2 S707Y downregulates expression of genes related to innate immunity and responseModulation of PLCγ2 for therapy must recapitulate the positive effects of moderate hypermorphic variants on microglial functions whilst avoiding detrimental effects of strongly hypermorphic variants like PLCγ2 S707YGraphical abstract