AbstractNiemann-Pick type C disease is a rare neurodegenerative disorder mainly caused by mutations in NPC1, resulting in abnormal late endosomal/lysosomal lipid storage. Although microgliosis is a prominent pathological feature, direct consequences of NPC1 loss on microglial function remain not fully characterized. We discovered pathological proteomic signatures and phenotypes in NPC1-deficient murine models and demonstrate a cell autonomous function of NPC1 in microglia. Loss of NPC1 triggers enhanced phagocytic uptake and impaired myelin turnover in microglia that precede neuronal death. Npc1^−/− microglia feature a striking accumulation of multivesicular bodies and impaired trafficking of lipids to lysosomes while lysosomal degradation function remains preserved. Molecular and functional defects were also detected in blood-derived macrophages of NPC patients that provide a potential tool for monitoring disease. Our study underscores an essential cell autonomous role for NPC1 in immune cells and implies microglial therapeutic potential.