BACKGROUND: Microglia and macrophages play a central role in neuroinflammation. Pro-inflammatory cytokines trigger their conversion to a classically activated (M1) phenotype, sustaining inflammation and producing a cytotoxic environment. Conversely, anti-inflammatory cytokines polarize the cells towards an alternatively activated (M2), tissue reparative phenotype. Elucidation of the signal transduction pathways involved in M1 to M2 phenotypic conversion may provide insight into how the innate immune response can be harnessed during distinct phases of disease or injury to mediate neuroprotection and neurorepair. METHODS: Microglial cells (cell line and primary) were subjected to combined cyclic adenosine monophosphate (cyclic AMP) and IL-4, or either alone, in the presence of pro-inflammatory mediators, lipopolysaccharide (LPS), or tumor necrosis factor-α (TNF-α). Their effects on the expression of characteristic markers for M1 and M2 microglia were assessed. Similarly, the M1 and M2 phenotypes of microglia and macrophages within the lesion site were then evaluated following a contusive spinal cord injury (SCI) to the thoracic (T8) spinal cord of rats and mice when the agents were administered systemically. RESULTS: It was demonstrated that cyclic AMP functions synergistically with IL-4 to promote M1 to M2 conversion of microglia in culture. The combination of cyclic AMP and IL-4, but neither alone, induced an Arg-1(+)/iNOS(-)cell phenotype with concomitant expression of other M2-specific markers including TG2 and RELM-α. M2-converted microglia showed ameliorated production of pro-inflammatory cytokines (TNF-α and IP-10) and reactive oxygen species, with no alteration in phagocytic properties. M2a conversion required protein kinase A (PKA), but not the exchange protein directly activated by cyclic AMP (EPAC). Systemic delivery of cyclic AMP and IL-4 after experimental SCI also promoted a significant M1 to M2a phenotypic change in microglia and macrophage population dynamics in the lesion. CONCLUSIONS: Using primary microglia, microglial cell lines, and experimental models of CNS injury, we demonstrate that cyclic AMP levels are a critical determinant in M1-M2 polarization. High levels of cyclic AMP promoted an Arg-1(+) M2a phenotype when microglia were activated with pro-inflammatory stimuli and Th2 cytokines. Th2 cytokines or cyclic AMP independently did not promote these changes. Phenotypic conversion of microglia provides a powerful new therapeutic approach for altering the balance of cytotoxic to reparative microglia in a diversity of neurological diseases and injury.