Tumor necrosis factor (TNF) is a pleiotropic cytokine powerfully influencing diverse processes of the central nervous system (CNS) under both physiological and pathological conditions. Here, we analyze current literature describing the molecular processes involved in TNF synthesis and release from microglia, the resident immune cells of the CNS and the main source of this cytokine both in brain development and neurodegenerative diseases. A special attention has been given to the unconventional vesicular pathway of TNF, based on the emerging role of microglia-derived extracellular vesicles (EVs) in the propagation of inflammatory signals and in mediating cell-to-cell communication. Moreover, we describe the contribution of microglial TNF in regulating important CNS functions, including the neuroinflammatory response following brain injury, the neuronal circuit formation and synaptic plasticity, and the processes of myelin damage and repair. Specifically, the available data on the functions mediated by microglial EVs carrying TNF have been scrutinized to gain insights on possible novel therapeutic strategies targeting TNF to foster CNS repair.