Multiple sclerosis (MS) is a neuroinflammatory disease characterized by expanding demyelinating lesions, leading to severe and irreversible disability.1–4 The mechanisms driving lesion expansion, however, remain poorly understood.5 Here, using a multi-omics approach, we identified foamy microglia lesions as primary contributors to lesion variability and disease progression in secondary progressive MS. Lesions with foamy microglia are marked by the accumulation of cholesterol esters, bismonoacylglycerolphosphates (BMP), and oxylipins, along with increased levels of Immunoglobulin G1, B-cell infiltration, and elevated expression of Fc- and complement receptors. Foamy GPNMB+-microglia display markers of enhanced phagocytosis, lipid metabolism, lysosomal dysfunction, and antigen presentation, but unexpectedly lack classical pro-inflammatory markers. Our data suggest that sustained phagocytosis of myelin overwhelms microglial endo-lysosomal capacity, leading to lipid droplet and oxylipin formation. This stressed microglial phenotype may in turn lead to the recruitment of adaptive immune cells, induce axonal damage, drive lesion expansion and prevent remyelination. Monoacylglycerol lipase, an enzyme producing oxylipin precursors, was identified as a potential therapeutic target to disrupt this cycle and prevent chronic lesion expansion.