Alzheimer's disease (AD) is the most common neurodegenerative disease, characterized by progressive memory loss and cognitive impairment due to excessive accumulation of extracellular amyloid-β plaques and intracellular neurofibrillary tangles. Although decades of research efforts have been put into developing disease-modifying therapies for AD, no "curative" drug has been identified. As a central player in neuro-inflammation, microglia play a key role inbrain homeostasis by phagocytosing debris and regulating the balance between neurotoxic and neuroprotective events. Typically, the neurotoxic phenotype of activated microglia is predominant in the impaired microenvironment of AD. Accordingly, transitioning the activity state of microglia from pro-inflammatory to anti-inflammatory can restore the disrupted homeostatic microenvironment. Recently, stem cell therapy holds great promise as a treatment for AD; however, the diminished survival of transplanted stem cells has resulted in a disappointing long-term outcome for this treatment. This article reviews the functional changes of microglia through the course of AD-associated homeostatic deterioration. We summarize the possible microglia-associated therapeutic targets including TREM2, IL-3Rα, CD22, C5aR1, CX3CR1, P2X7R, CD33, Nrf2, PPAR-γ, CSF1R, and NLRP3, each of which has been discussed in detail. The goal of this review is to put forth the notion that microglia could be targeted by either small molecules or biologics to make the brain microenvironment more amenable to stem cell implantation and propose a novel treatment strategy for future stem cell interventions in AD.