The glycoproteins and glycolipids of the cell surface have sugar chains that normally terminate in a sialic acid residue, but inflammatory activation of myeloid cells can cause sialidase enzymes to remove these residues, resulting in desialylation and altered activity of surface receptors, such as the phagocytic complement receptor 3 (CR3). We found that activation of microglia with lipopolysaccharide (LPS), fibrillar amyloid beta (Aβ), Tau or phorbol myristate acetate (PMA) resulted in increased surface sialidase activity and desialylation of the microglial surface. Desialylation of microglia by adding sialidase, stimulated microglial phagocytosis of beads, but this was prevented by siRNA knockdown of CD11b or a blocking antibody to CD11b (a component of CR3). Desialylation of microglia by a sialyl-transferase inhibitor (3FAx-peracetyl-Neu5Ac) also stimulated microglial phagocytosis of beads. Desialylation of primary glial-neuronal co-cultures by adding sialidase or the sialyl-transferase inhibitor resulted in neuronal loss that was prevented by inhibiting phagocytosis with cytochalasin D or the blocking antibody to CD11b. Adding desialylated microglia to glial-neuronal cultures, in the absence of neuronal desialylation, also caused neuronal loss prevented by CD11b blcking antibody. Adding LPS or Aβ to primary glial-neuronal co-cultures caused neuronal loss, and this was prevented by inhibiting endogenous sialidase activity with N-Acetyl-2,3-dehydro-2-deoxyneuraminic acid (DANA) or blockage of CD11b. Thus, activated microglia release a sialidase activity that desialylates the cell surface, stimulating CR3-mediated phagocytosis of neurons, making extracellular sialidase and CR3 potential treatment targets to prevent inflammatory loss of neurons.