Recent evidence suggests that type I interferon (IFN-I) signalling extends beyond its canonical roles in antiviral defence and immunomodulation. Over the past decade, dysregulated IFN-I signalling has been linked to genetic disorders and neurodegenerative diseases, where it may contribute to neurological impairments. Microglia have emerged as key mediators of IFN-I responses in the central nervous system. A distinct transcriptional state responsive to interferons has recently been identified in microglia. The activation of the IFN-I pathway in these cells is now recognised as pivotal in both development and neurodegeneration. This review is divided into two main sections: the first examines the broader role of IFN-I signalling in the central nervous system, particularly its contribution to neurological dysfunction; the second focuses on the specific state of interferon-responsive microglia, exploring its mechanisms and relevance in neurodegenerative conditions. Finally, we discuss how these areas intersect and their implications for both healthy and diseased states.