An important component of chronic neurodegenerative diseases is the generation of an innate inflammatory response within the CNS. Microglial and astroglial cells play a key role in the development and maintenance of this inflammatory response, showing enhanced proliferation and activation. We studied the time course and regulation of microglial proliferation, using a mouse model of prion disease. Our results show that the proliferation of resident microglial cells accounts for the expansion of the population during the development of the disease. We identify the pathway regulated by the activation of CSF1R and the transcription factors PU.1 and C/EBPα as the molecular regulators of the proliferative response, correlating with the chronic human neurodegenerative conditions variant Creutzfeldt-Jakob disease and Alzheimer's disease. We show that targeting the activity of CSF1R inhibits microglial proliferation and slows neuronal damage and disease progression. Our results demonstrate that microglial proliferation is a major component in the evolution of chronic neurodegeneration, with direct implications for understanding the contribution of the CNS innate immune response to disease progression.