Aberrant activity of the retrotransposable element long interspersed nuclear element-1 (LINE-1) has been hypothesized to contribute to cellular dysfunction in age-related disorders, including late-onset Alzheimer's disease (LOAD). However, whether LINE-1 is differentially expressed in cell types of the LOAD brain, and whether these changes contribute to disease pathology is largely unknown. Here, we examined patterns of LINE-1 expression across neurons, astrocytes, oligodendrocytes, and microglia in human postmortem prefrontal cortex tissue from LOAD patients and cognitively normal, age-matched controls. We report elevated immunoreactivity of the open reading frame 1 protein (ORF1p) encoded by LINE-1 in microglia from LOAD patients and find that this immunoreactivity correlates positively with disease-associated microglial morphology. In human iPSC-derived microglia (iMG), we found that CRISPR-mediated transcriptional activation of LINE-1 drives changes in microglial morphology and cytokine secretion and impairs the phagocytosis of amyloid beta (Aβ). We also find LINE-1 upregulation in iMG induces transcriptomic changes genes associated with antigen presentation and lipid metabolism as well as impacting the expression of many AD-relevant genes. Our data posit that heightened LINE-1 expression may trigger microglial dysregulation in LOAD and that these changes may contribute to disease pathogenesis, suggesting a central role for LINE-1 activity in human LOAD.