Spinal cord injury (SCI) sets off a cascade of biochemical and cellular events that destroy neurons, cause demyelination, and trigger an inflammatory immune response. Microglia, the immune-competent cells of the central nervous system, migrate to the site of injury, become activated and are thought to contribute to secondary damage and neurodegeneration following SCI. Conversely, growth factors and cytokines released by activated microglia may promote regeneration. Controversy exists over the neurodegenerative verses the neuroregenerative roles of activated microglia, and which role predominates following SCI. The activation state of microglia determines their neurotoxic and neurotrophic properties that influence the surrounding environment to have restorative or detrimental effects. To address the question of whether the spatio-temporal distribution of activated microglia determines their neurotoxic or neuroprotective behavior the dorsal hemisection of SCI was performed on wild type or CD11b-HSVTK+/- (herpes simplex virus thymidine kinase) mice. Microglia were either ablated or activation was inhibited via the administration of ganciclovir (GCV) or macrophage/microglial inhibitory factor (MIF), respectively. Ablation of or suppressing activation of microglia at early time points post SCI reduced secondary injury around the lesion epicenter, decreased the hypertrophic change of astrocytes and caused a increase in the number of axons present within the lesion epicenter. Moreover, inhibition of microglial activation with MIF reduced oligodendrocyte apoptosis and demyelination. In addition, microglia located within or proximal to the lesion produced more toxic factors, such as tumor necrosis factor alpha (TNF-<em>f</em>?¾), while microglial distal to the lesion produce more trophic factors, such as interleukin-10 (IL-10). This suggests that microglia within the epicenter at early time points post injury are neurotoxic, contributing to demyelination and axonal degeneration.