Iron is a vital element required by almost all cells for their normal functioning. The well-established role of iron in oxidative metabolism, myelination and synthesis of neurotransmitter makes it an indispensable nutrient required by the brain. Both iron deficiency and excess have been associated with numerous patho-physiologies of the brain, suggesting a need for iron homeostasis. Various studies have reported that the immune effector cells of the brain, the microglial cells, are involved in iron homeostasis in the brain. Microglial cells, which accumulate iron during the developmental period, have a role in myelination process. Along with the increased iron accumulation documented in neurodegenerative diseases, the striking finding is the presence of iron positive microglial cells at the foci of lesion. Though excess iron within activated microglia is demonstrated to enhance the release of pro-inflammatory cytokines and free radicals, a complete understanding of the role of iron in microglia is lacking. The present knowledge on iron mediated changes, in the functions of microglia is summarized in this review.