A complex therapeutic challenge for Alzheimer’s disease (AD) is minimizing deleterious aspects of microglial activation while maximizing beneficial actions, including phagocytosis/clearance of amyloid β (Aβ) peptides. One potential target is selective suppression of microglial prostaglandin E₂ receptor subtype 2 (EP2) function, which influences microglial phagocytosis and elaboration of neurotoxic cytokines. To test this hypothesis, we transplanted bone marrow cells derived from wild-type mice or mice homozygous deficient for EP2 (EP2^−/−) into lethally irradiated 5-month-old wild-type or APPswe-PS1ΔE9 double transgenic AD mouse model recipients. We found that cerebral engraftment by bone marrow transplant (BMT)-derived wild-type or EP2^−/− microglia was more efficient in APPswe-PS1ΔE9 than in wild-type mice, and APPswe-PS1ΔE9 mice that received EP2^−/− BMT had increased cortical microglia compared with APPswe-PS1ΔE9 mice that received wild-type BMT. We found that myeloablative irradiation followed by bone marrow transplant-derived microglia engraftment, rather than cranial irradiation or BMT alone, was responsible for the approximate one-third reduction in both Aβ plaques and potentially more neurotoxic soluble Aβ species. An additional 25% reduction in cerebral cortical Aβ burden was achieved in mice that received EP2^−/− BMT compared with mice that received wild-type BMT. Our results provide a foundation for an adult stem cell-based therapy to suppress soluble Aβ peptide and plaque accumulation in the cerebrum of patients with AD.