An inflammatory process in the central nervous system (CNS) is believed to play an important role in the pathway leading to neuronal cell death in a number of neurodegenerative diseases including Parkinsons disease, Alzheimers disease, prion diseases, multiple sclerosis and HIV-dementia. The inflammatory response is mediated by the activated microglia, the resident immune cells of the CNS, which normally respond to neuronal damage and remove the damaged cells by phagocytosis. Activation of microglia is a hallmark of brain pathology. However, it remains controversial whether microglial cells have beneficial or detrimental functions in various neuropathological conditions. The chronic activation of microglia may in turn cause neuronal damage through the release of potentially cytotoxic molecules such as proinflammatory cytokines, reactive oxygen intermediates, proteinases and complement proteins. Therefore, suppression of microglia-mediated inflammation has been considered as an important strategy in neurodegenerative disease therapy. Several anti-inflammatory drugs of various chemical ingredients have been shown to repress the microglial activation and to exert neuroprotective effects in the CNS following different types of injuries. However, the molecular mechanisms by which these effects occur remain unclear. In recent years, several research groups including ours have attempted to explain the potential mechanisms and signaling pathways for the repressive effect of various drugs, on activation of microglial cells in CNS injury. We provide here a comprehensive review of recent findings of mechanisms and signaling pathways by which microglial cells are activated in CNS inflammatory diseases. This review article further summarizes the role of microglial cells in neurodegenerative diseases and various forms of potential therapeutic options to inhibit the microglial activation which amplifies the inflammation-related neuronal injury in neurodegenerative diseases.