Triggering receptor expressed on myeloid cells 2 (TREM2) is an innate immune receptor expressed in microglia in the brain. A soluble form of TREM2 (sTREM2) derived from proteolytic cleavage of the cell surface receptor is increased in the preclinical stages of AD and positively correlates with the amounts of total and phosphorylated tau in the cerebrospinal fluid. However, the physiological and pathological functions of sTREM2 remain unknown. Here, we show that sTREM2 promotes microglial survival in a PI3K/Akt-dependent manner and stimulates the production of inflammatory cytokines depending on NF-κB. Variants of sTREM2 carrying AD risk-associated mutations were less potent in both suppressing apoptosis and triggering inflammatory responses. Importantly, sTREM2 delivered to the hippocampi of both wild-type and Trem2-knockout mice elevated the expression of inflammatory cytokines and induced morphological changes of microglia. Collectively, these data indicate that sTREM2 triggers microglial activation inducing inflammatory responses and promoting survival. This study has implications for the pathogenesis of AD and provides insights into targeting sTREM2 pathway for AD therapy.