In this study microglial cells isolated from brain cell cultures of newborn mice were characterized and investigated for morphology, their responses to growth factors and their functional properties. The microglial cells were phagocytic, contained nonspecific esterase activity and expressed Fc (IgG_1/2b) and type‐3 complement receptors. Scanning electron microscopy revealed that in analogy to brain tissue two types of microglial cells are present in the cultures: the ameboid and the ramified type which both display similar appearance by transmission electron microscopy. Interleukin 3 and the granulocyte‐macrophage colony‐stimulating factor were potent growth factors for the cultured microglial cells. The cells were negative for class II antigens (Ia) of the major histocompatibility antigen complex. However, upon treatment with interferon‐γ (IFN‐γ) microglial cells became Ia⁺ and functioned as antigen‐presenting cells when tested on ovalbumin‐specific Ia‐restricted helper T cells. Furthermore, microglial cells exposed to IFN‐γ and endotoxin developed tumor cell cytotoxicity and produced tumor necrosis factor α. Taken together, microglial cells share the characteristics of cells of the macrophage lineage.