Alzheimer's disease (AD) is a neurodegenerative disease characterized by progressive decline of cognitive function. There is no therapy that can halt or reverse its progression. Contemporary research suggests that age-dependent neuroinflammatory changes may play a significant role in the decreased neurogenesis and cognitive impairments in AD. The innate immune response is characterized by pro-inflammatory (M1) activation of macrophages and subsequent production of specific cytokines, chemokines, and reactive intermediates, followed by resolution and alternative activation for anti-inflammatory signaling (M2a) and wound healing (M2c). We propose that microglial activation phenotypes are analogous to those of macrophages and that their activation plays a significant role in regulating neurogenesis in the brain. Microglia undergo a switch from an M2- to an M1-skewed activation phenotype during aging. This review will assess the neuroimmunological studies that led to characterization of the different microglial activation states in AD mouse models. It will also discuss the roles of microglial activation on neurogenesis in AD and propose anti-inflammatory molecules as exciting therapeutic targets for research. Molecules such as interleukin-4 and CD200 have proven to be important anti-inflammatory mediators in the regulation of neuroinflammation in the brain, which will be discussed in detail for their therapeutic potential.