Elderly patients with traumatic brain injury (TBI) have greater mortality and poorer outcomes than younger individuals. The extent to which old age alters long-term recovery and chronic microglial activation after TBI is unknown, and evidence for therapeutic efficacy in aged mice is sorely lacking. The present study sought to identify potential inflammatory mechanisms underlying age-related outcomes late after TBI. Controlled cortical impact was used to induce moderate TBI in young and old male C57BL/6 mice. At 12 weeks post-injury, aged mice exhibited higher mortality, poorer functional outcomes, larger lesion volumes, and increased microglial activation. Transcriptomic analysis identified age- and TBI-specific gene changes consistent with a disease-associated microglial signature in the chronically injured brain, including those involved with complement, phagocytosis, and autophagy pathways. Dysregulation of phagocytic and autophagic function in microglia was accompanied by increased neuroinflammation in old mice. As proof-of-principle that these pathways have functional importance, we administered an autophagic enhancer, trehalose, in drinking water continuously for 8 weeks after TBI. Old mice treated with trehalose showed enhanced functional recovery and reduced microglial activation late after TBI compared to the sucrose control group. Our data indicate that microglia undergo chronic changes in autophagic regulation with both normal aging and TBI that are associated with poorer functional outcome. Enhancing autophagy may therefore be a promising clinical therapeutic strategy for TBI, especially in older patients.