Microglial cells are resident cells of the CNS and are implicated as regulators and effectors of immune responses which occur within this compartment. The precise role of parenchymal microglia remains speculative because distinctions between these cells, perivascular "microglia," and blood-derived monocytes/macrophages are not well defined. The current study describes the phenotype and function of microglia immediately upon isolation from the non-inflamed adult human CNS and the phenotypic changes which occur in these cells when maintained in tissue culture. We find that the characteristic phenotype of immediately ex vivo parenchymal microglia (CD11c+/CD45low/CD14) corresponds to that found in situ in the "normal" human brain. The phenotype differs from that of perivascular "microglia" in situ and PBDM (both CD45hi/CD14++). The immediately ex vivo microglia express B7-2 and HLA class II molecules and can support alloantigen-induced proliferation by CD4+ T cells freshly isolated from peripheral blood. Following in vitro culture, the cells are characterized by a bipolar morphology, continued lower levels of CD45 expression compared to PBDM, and slight upregulation of B7-1 and HLA-DR antigen expression. CD14 becomes expressed at high levels on the cells, suggesting that CD14 can serve as an apparent marker of microglia activation which is not based on changes in morphology or APC capacity. Further, treatment of the cells with IFN-gamma and LPS causes further upregulation of HLA-DR and clear expression of B7-1 molecules on the surface. The capacity to characterize phenotypic and functional properties of microglia before and after activation provides an opportunity to determine means to manipulate the immune regulatory and effector properties of this cell type.