The role of tumor necrosis factor (TNF) as an immune mediator has long been appreciated but its function in the brain is still unclear. TNF receptor 1 (TNFR1) is expressed in most cell types, and can be activated by binding of either soluble TNF (solTNF) or transmembrane TNF (tmTNF), with a preference for solTNF; whereas TNFR2 is expressed primarily by microglia and endothelial cells and is preferentially activated by tmTNF. Elevation of solTNF is a hallmark of acute and chronic neuroinflammation as well as a number of neurodegenerative conditions including ischemic stroke, Alzheimer's (AD), Parkinson's (PD), amyotrophic lateral sclerosis (ALS), and multiple sclerosis (MS). The presence of this potent inflammatory factor at sites of injury implicates it as a mediator of neuronal damage and disease pathogenesis, making TNF an attractive target for therapeutic development to treat acute and chronic neurodegenerative conditions. However, new and old observations from animal models and clinical trials reviewed here suggest solTNF and tmTNF exert different functions under normal and pathological conditions in the CNS. A potential role for TNF in synaptic scaling and hippocampal neurogenesis demonstrated by recent studies suggest additional in-depth mechanistic studies are warranted to delineate the distinct functions of the two TNF ligands in different parts of the brain prior to large-scale development of anti-TNF therapies in the CNS. If inactivation of TNF-dependent inflammation in the brain is warranted by additional pre-clinical studies, selective targeting of TNFR1-mediated signaling while sparing TNFR2 activation may lessen adverse effects of anti-TNF therapies in the CNS.