Cytokines constitute a significant portion of the immuno‐ and neuromodulatory messengers that can be released by activated microglia. By virtue of potent effects on resident and invading cells, microglial cyto‐ and chemokines regulate innate defense mechanisms, help the initiation and influence the type of immune responses, participate in the recruitment of leukocytes to the CNS, and support attempts of tissue repair and recovery. Microglia can also receive cyto‐ and chemokine signals as part of auto‐ and paracrine communications with astrocytes, neurons, the endothelium, and leukocyte infiltrates. Strong responses and modulatory influences can be demonstrated, adding to the emerging view that microglial behavior is highly dependent on the (cytokine) environment and that reactions to a challenge may vary with the stimulation context. In principle, microglial activation aims at CNS protection. However, failed microglial engagement due to excessive or sustained activation could significantly contribute to acute and chronic neuropathologies. Dysregulation of microglial cytokine production could thereby promote harmful actions of the defense mechanisms, result in direct neurotoxicity, as well as disturb neural cell functions as they are sensitive to cytokine signaling. GLIA 40:140–155, 2002. © 2002 Wiley‐Liss, Inc.