To monitor the cascade of events initiated by injury of adult neurons, and to explore whether and how neighboring microglial cells contribute to the degradation of lesioned neurons, axotomy-induced ganglion cell degeneration was investigated in adult rats. Suppression of macrophage and microglia activity during the weeks following transection of the optic nerve was performed with the immunoglobulin-derived tripeptide Thr-Lys-Pro, which is a macrophage inhibitory factor (MIF) and retards the activity of cells of monocytic origin. Single or repeated injection of MIF into the vitreous body during and after transection of the optic nerve resulted in significant retardation of axotomy-induced ganglion cell degradation in the retina as detected by specific labeling with the retrogradely transported fluorescent dye 4Di-10ASP. MIF specifically altered the morphology of labeled microglial cells from a ramified to an oval, less ramified shape, indicating that these cells were targets of its activity. Injection of the tetrapeptide macrophage stimulating factor, also known as tuftsin (Thr-Lys-Pro-Arg), revealed effects opposite to those described for the MIF: it increased the number of labeled microglial cells and enhanced the devastating effects of axotomy on ganglion cells. The viability of rescued ganglion cells in retinas treated with the various drugs was assessed both in vivo and in vitro. (1) Intravitreal injection of MIF to prevent degradation of neurons combined with transplantation of autologous peripheral nerve grafts, which facilitate regrowth of the transected neurites, revealed that significantly more ganglion cells contributed to axonal regeneration (17.1%) than in untreated controls (9.5%). (2) Explantation of retinas that were pretreated with MIF in situ revealed higher incidence of axonal outgrowth in organ cultures than untreated control explants or retinas treated with either the basic fibroblast growth factor or brain-derived neurotrophic factor. The present results demonstrate that axotomy initializes a cascade of microglia-mediated autodestructive retinal responses, which culminate in degradation of “sick,” but obviously viable neurons. We postulate that the retinal microglial system has a key role in recognizing and eliminating severed neurons.