Triggering receptor expressed on myeloid cell 2 (TREM2) is linked to neurodegenerative disease risk. However, the function of TREM in neurodegeneration is still unclear. Here we investigated the role of microglial TREM2 in TAR-DNA binding protein 43 kDa (TDP-43)-related neurodegeneration using viral-mediated and transgenic mouse models. We found that TREM2 deficiency impaired phagocytic clearance of pathological TDP-43 by microglia, and enhanced neuronal damage and motor impairments. Mass cytometry analysis revealed that hTDP-43 induced a TREM2-dependent subpopulation of microglia with high CD11c expression and phagocytic ability. Using mass spectrometry and surface plasmon resonance analysis, we further demonstrated an interaction between TDP-43 and TREM2 in vitro and in vivo as well as in ALS patient tissues. We computationally identified the region within hTDP-43 that interacts with TREM2. Our data highlights that TDP-43 is a possible ligand for microglial TREM2 and that this interaction mediates neuroprotection effects of microglia in TDP-43-related neurodegeneration.