Microglia cells are phagocytic sentinels in the CNS and in the retina required for neuronal homeostasis and innate immune defense. Accumulating experimental evidence suggests that chronic microglia activation is associated with various neurodegenerative diseases including retinal dystrophies. Endogenous triggers alert microglia cells rapidly in the degenerating retina, leading to local proliferation, migration, enhanced phagocytosis, and secretion of cytokines, chemokines, and neurotoxins. This amplified, immunological cascade and the loss of limiting control mechanisms may contribute significantly to retinal tissue damage and proapoptotic events. This review summarizes the developmental and immune surveillance functions of microglia in the healthy retina and discusses early signaling events and transcriptional networks of microglia activation in retinal degeneration. The characterization of activation pathways at the molecular level may lead to innovative, therapeutic options in degenerative retinal diseases based on a selective, pharmacological interference with the neurotoxic activities of microglia cells, without compromising their homeostastic functions.