Frontotemporal dementia (FTD) is a common cause of early-onset dementia, with no current treatment options. FTD linked to chromosome 3 (FTD3) is a rare sub-form of the disease, caused by a point mutation in the Charged Multivesicular Body Protein 2B (CHMP2B). This mutation causes neuronal phenotypes, such as mitochondrial deficiencies, accompanied by metabolic changes and interrupted endosomal-lysosomal fusion. However, the contribution of glial cells to FTD3 pathogenesis has, until recently, been largely unexplored. Glial cells play an important role in most neurodegenerative disorders as drivers and facilitators of neuroinflammation. Microglia are at the center of current investigations as potential pro-inflammatory drivers. While gliosis has been observed in FTD3 patient brains, it has not yet been systematically analyzed. In the light of this, we investigated the role of microglia in FTD3 by implementing human induced pluripotent stem cells (hiPSC) with either a heterozygous or homozygous CHMP2B mutation, introduced into a healthy control hiPSC line via CRISPR-Cas9 precision gene editing. These hiPSC were differentiated into microglia to evaluate the pro-inflammatory profile and metabolic state. Moreover, hiPSC-derived neurons were cultured with conditioned microglia media to investigate disease specific interactions between the two cell populations. Interestingly, we identified two divergent inflammatory microglial phenotypes resulting from the underlying mutations: a severe pro-inflammatory profile in CHMP2B homozygous FTD3 microglia, and an "unresponsive" CHMP2B heterozygous FTD3 microglial state. These findings correlate with our observations of increased phagocytic activity in CHMP2B homozygous, and impaired protein degradation in CHMP2B heterozygous FTD3 microglia. Metabolic mapping confirmed these differences, revealing a metabolic reprogramming of the CHMP2B FTD3 microglia, displayed as a compensatory up-regulation of glutamine metabolism in the CHMP2B homozygous FTD3 microglia. Intriguingly, conditioned CHMP2B homozygous FTD3 microglia media caused neurotoxic effects, which was not evident for the heterozygous microglia. Strikingly, IFN-γ treatment initiated an immune boost of the CHMP2B heterozygous FTD3 microglia, and conditioned microglia media exposure promoted neural outgrowth. Our findings indicate that the microglial profile, activity, and behavior is highly dependent on the status of the CHMP2B mutation. Our results suggest that the heterozygous state of the mutation in FTD3 patients could potentially be exploited in form of immune-boosting intervention strategies to counteract neurodegeneration.