Neurogenesis is altered in neurodegenerative disorders, partly regulated by inflammatory factors. We have investigated whether microglia, the innate immune brain cells, regulate hippocampal neurogenesis in neurodegeneration. Using the ME7 model of prion disease we applied gain- or loss-of CSF1R function, as means to stimulate or inhibit microglial proliferation, respectively, to dissect the contribution of these cells to neurogenesis. We found that increased hippocampal neurogenesis correlates with the expansion of the microglia population. The selective inhibition of microglial proliferation caused a reduction in neurogenesis and a restoration of normal neuronal differentiation, supporting a pro-neurogenic role for microglia. Using a gene screening strategy, we identified TGFβ as a molecule controlling the microglial pro-neurogenic response in chronic neurodegeneration, supported by loss-of-function mechanistic experiments. By the selective targeting of microglial proliferation we have been able to uncover a pro-neurogenic role for microglia in chronic neurodegeneration, suggesting promising therapeutic targets to normalise the neurogenic niche during neurodegeneration.