More than forty loci contribute to genetic risk for Alzheimer’s disease (AD). These risk alleles are enriched in myeloid cell enhancers suggesting that microglia, the brain-resident macrophages, contribute to AD risk. We have previously identified SPI1/PU.1, a master regulator of myeloid cell development in the brain and periphery, as a genetic risk factor for AD. Higher expression of SPI1 is associated with increased risk for AD, while lower expression is protective. To investigate the molecular and cellular phenotypes associated with higher and lower expression of PU.1 in microglia, we used stable overexpression and knock-down of PU.1 in BV2, an immortalized mouse microglial cell line. Transcriptome analysis suggests that reduced PU.1 expression suppresses expression of homeostatic genes similar to the disease-associated microglia response to amyloid plaques in mouse models of AD. Moreover, PU.1 knock-down resulted in activation of protein translation, antioxidant action and cholesterol/lipid metabolism pathways with a concomitant decrease of pro-inflammatory gene expression. PU.1 overexpression upregulated and knock-down downregulated phagocytic uptake in BV2 cells independent of the nature of the engulfed material. However, cells with reduced PU.1 expression retained their ability to internalize myelin similar to control albeit with a delay, which aligns with their anti-inflammatory profile. Here we identified several microglial responses that are modulated by PU.1 expression levels and propose that risk association of PU.1 to AD is driven by increased pro-inflammatory response due to increased viability of cells under cytotoxic conditions. In contrast, low expression of PU.1 leads to increased cell death under cytotoxic conditions accompanied by reduced pro-inflammatory signaling that decreased A1 reactive astrocytes signature supporting the protective effect of SPI1 genotype in AD. These findings inform future in vivo validation studies and design of small molecule screens for therapeutic discovery in AD.