Microglia are resident immune cells of the central nervous system, which in concert with astrocytes and peripherally recruited immune cells initiate a pro-inflammatory response after injury and disease that results in oligodendroglial death and myelin damage. We have shown that down-regulation of a neuronally-derived growth factor, neuregulin-1, in demyelinating lesions of the spinal cord is an underlying mechanism for insufficient spontaneous oligodendrogenesis and remyelination. Recent evidence suggests that Nrg-1 treatment positively regulates the repair process and remyelination by modulating neuroinflammation. The goal of the present study was to determine the role of Nrg-1 in regulating microglia response in normal and injury state. In primary in vitro systems, we demonstrate a positive role for Nrg-1 in regulating microglia activity and the impact of Nrg-1 treatment on the effects of microglia on the behavior of neural precursor cells (NPCs). Using an array of cellular and molecular assays, we found that Nrg-1 attenuated the transcript expression of several pro-inflammatory markers such as tumor necrosis factor- (TNF-) α, interleukin- (IL-) 6, CD86 and the production of nitric oxide (NO). In addition, Nrg-1 restored the suppressed phagocytic ability in M1-polarized microglia cultures. Our findings showed that microglia conditioned media (MCM) from Nrg-1 treated M1-polarized microglia cultures promoted migration and proliferation of NPCs. Hence, our findings suggest that Nrg-1 therapy could be exploited to foster a pro-regenerative phenotype in microglia, which is supportive of repair and regeneration following CNS injuries and diseases.