As resident macrophages of the CNS, microglia are critical immune effectors of inflammatory lesions and associated neural dysfunctions. In multiple sclerosis (MS) and its animal models, chronic microglial inflammatory activity damages myelin and disrupts axonal and synaptic activity. In contrast to these detrimental effects, the potent phagocytic and tissue-remodelling capabilities of microglia support critical endogenous repair mechanisms. Although these opposing capabilities have long been appreciated, a precise understanding of their underlying molecular effectors is only beginning to emerge. Here, we review recent advances in our understanding of the roles of microglia in animal models of MS and demyelinating lesions and the mechanisms that underlie their damaging and repairing activities. We also discuss how the structured organization and regulation of the genome enables complex transcriptional heterogeneity within the microglial cell population at demyelinating lesions.