The heterogeneity of microglial functions have either beneficial or detrimental roles in specific physiological or pathological environments. However, the details of what transcriptional mechanisms induce microglia to take beneficial phenotypes remain unknown. Here, we report that Foxp3 is essential for beneficial outcome of the microglial response and depends upon signalling by the immunoglobulin CD200 through its receptor (CD200R). Foxp3 expression was up-regulated in microglia activated by excitotoxicity-induced hippocampal neuroinflammation. Suppression of CD200R prevented anti-inflammatory phenotype of microglia, but over-expression of Foxp3 enhanced it. Phosphorylation of STAT6, a downstream effector of CD200R, modulated transcription of Foxp3. Finally, CD200R/Foxp3-mediated signalling enhanced hippocampal neuronal viability and conferred a degree of neuroprotection, presumably by counteracting inducible nitric oxide synthase. We conclude that enhancement of Foxp3 through CD200R could be neuroprotective by targeting the microglia.