Mucopolysaccharidosis III type C (MPS IIIC) is an untreatable neuropathic lysosomal storage disease caused by a genetic deficiency of the lysosomal N-acetyltransferase, HGSNAT, catalyzing a transmembrane acetylation of heparan sulfate. HGSNAT is a transmembrane enzyme uncapable of free diffusion between the cells and their cross-correction which limits development of therapies based on the enzyme replacement and gene correction. Since our previous work identified neuroinflammation as a hallmark of the CNS pathology in MPS IIIC, we tested whether it can be corrected by replacement of activated brain microglia with neuroprotective macrophages/microglia derived from a heterologous HSPC transplant.Eight-week-old MPS IIIC (HgsnatP304L) mice were transplanted with HSPC from congenic WT mice after myeloablation with Busulfan and studied by behaviour test battery staring from the age of 6 months. At the age of ∼8 months, mice were sacrificed to study pathological changes in the brain, heparan sulfate storage and other biomarkers of the disease. We found that the treatment corrected several behaviour deficits including memory decline, and reduction of socialization, as well as several features of CNS pathology such as microastroglyosis, expression of pro-inflammatory cytokine IL-1β, and accumulation of misfolded amyloid aggregates in cortical neurons. At the periphery, the treatment delayed development of terminal urinary retention, potentially increasing longevity, and reduced blood levels of heparan sulfate. However, no correction of lysosomal storage phenotype in neurons and brain levels of heparan sulfate was observed.Together, our results demonstrate that neuroinflammation in a neurological lysosomal storage disease, caused by defects in a transmembrane enzyme, can be effectively ameliorated by replacement of microglia bearing the genetic defect with the cells from normal healthy donor. They also suggest, that heterologous HSPC transplant if used together with other methods, such as chaperone therapy or substrate reduction therapy, may constitute an effective combination therapy for MPS IIIC and other disorders with a similar etiology.