Microglia are the immune cells of the central nervous system (CNS) and play important roles under physiological and pathophysiological conditions. Activation of microglia has been reported for a variety of CNS diseases and is believed to be involved in inflammation-mediated neurodegeneration. Loss of TGFβ1 results in increased microgliosis and neurodegeneration in mice which indicates that TGFβ1 is an important regulator of microglial functions in vivo. Here, we addressed the role of endogenous TGFβ signaling for microglia in vitro. We clearly demonstrate active TGFβ signaling in primary microglia and further introduce Klf10 as a new TGFβ target gene in microglia. Moreover, we provide evidence that microglia express and release TGFβ1 that acts in an autocrine manner to activate microglial TGFβ/Smad signaling in vitro. Using microarrays, we identified TGFβ-regulated genes in microglia that are involved in TGFβ1 processing, its extracellular storage as well as activation of latent TGFβ. Finally, we demonstrate that pharmacological inhibition of microglial TGFβ signaling resulted in upregulation of the proinflammatory markers IL6 and iNOS and downregulation of the alternative activation markers Arg1 and Ym1 in vitro. Together, these data clearly show that endogenous TGFβ1 and autocrine TGFβ signaling is important for microglial quiescence in vitro and further suggest the upregulation of TGFβ1 in neurodegenerative diseases as a mechanism to regulate microglia functions and silence neuroinflammation.