Bruton's tyrosine kinase (BTK), a critical component of B cell receptor signaling, has recently been implicated in regulation of the peripheral innate immune response. However, the role of BTK in microglia, the resident innate immune cells of the central nervous system, and its involvement in the pathobiology of neurodegenerative disease has not been explored. Here we found that BTK is a key regulator of microglial phagocytosis. Using potent BTK inhibitors and small interfering RNA (siRNA) against BTK, we observed that blockade of BTK activity decreased activation of phospholipase gamma 2, a recently identified genetic risk factor in Alzheimer's disease (AD), and reduced phagocytosis in rodent microglia and human monocyte-derived macrophages. Inhibition of BTK signaling also decreased microglial uptake of synaptosomes but did not have major impacts on other key microglial functions such as migration and cytokine release. Similarly, blocking BTK function ex vivo in acute brain slices reduced microglial phagocytosis and maintained numbers of resting microglia. In brain tissues from the 5xFAD mouse model of AD, levels of microglial BTK were elevated while in two gene expression datasets of post-mortem AD patient brain tissues, upregulation of BTK transcript was observed. Our study provides novel insights into the role of BTK in regulating microglial phagocytosis and uptake of synaptic structures and suggests that inhibiting microglial BTK may improve cognition in AD by preventing microglial activation and synaptic loss. Graphical Abstract Microglial-mediated synapse loss has been implicated in AD pathogenesis. Inhibition of BTK decreases activation of PLCγ2, a genetic risk factor in AD, and reduces microglial phagocytosis and uptake of synaptic structures. As such BTK inhibition may represent a therapeutic route to prevent microglial activation and synapse loss in AD.