In this review, we provide a detailed overview of how APOE alleles differentially regulate microglial activation, inflammatory signaling, phagocytic activity, and lipid metabolism in the context of AD, with a particular focus on the APOEε4-mediated disruption of microglial homeostasis via pathways such as TREM2 signaling, NF-κB/NLRP3 activation, ACSL1 upregulation, and HIF-1α induction. Here, TREM2 is linked to Alzheimer disease.