Neuroinflammation is increasingly recognized as a key factor in the pathogenesis of neurodegenerative conditions. However, it remains unclear whether it has a protective or damaging role. Studies of Alzheimer's disease and Parkinson's disease have provided much of the evidence for inflammatory pathology in neurodegeneration. Here we review the evidence for inflammation in dementia with Lewy bodies and Parkinson's disease dementia. Neuroinflammation has been confirmed in vivo using PET imaging, with microglial activation seen in Parkinson's disease dementia and recently in dementia with Lewy bodies. In Parkinson's disease and Parkinson's disease dementia, microglial activation suggests a chronic inflammatory process, although there is also evidence of its association with cognitive ability and neuronal function. Alpha-synuclein in various conformations has also been linked to activation of microglia, with a broad range of components of the innate and adaptive immune systems associated with this interaction. Evidence of neuroinflammation in Lewy body dementia is further supported by pathological and biomarker studies. Genetic and epidemiological studies support a role for inflammation in Parkinson's disease, but have yet to provide the same for Lewy body dementia. This review highlights the need to identify whether the nature and extent of microglial activation in Lewy body dementia can be linked to structural change, progression of domain specific cognitive symptoms and peripheral inflammation as a marker of central microglial pathology. Answers to these questions will enable the evaluation of immunotherapies as potential therapeutic options for prevention or treatment of dementia with Lewy bodies and Parkinson's disease dementia.