Neuroinflammation is associated with pathogenesis of Parkinson’s disease (PD), a neurodegenerative disorder characterized by a progressive loss of dopaminergic (DAergic) neurons within the substantia nigra. Transforming growth factor (TGF)-β1 exerts anti-inflammatory and neuroprotective properties. However, it is unclear if microglia are required for TGF-β1 neuroprotection in PD. Here we used both shRNA and pharmacologic inhibition to determine the role of microglial TGF-β receptor (TβR)-I and its downstream signaling pathways in 1-methyl-4-phenylpyridinium (MPP⁺)-induced DAergic neuronal toxicity. As expected, MPP⁺ reduced the number of tyrosine hydroxylase (TH)-immunoreactive cells in ventral mesencephalic cell cultures. We found that MPP⁺ activated microglia as determined by an upregulation in expression of CD11b and inducible nitric oxide synthase (iNOS), an increase in expression and secretion of tumor necrosis factor (TNF)-α and interleukin (IL)-1β, and a decrease in expression and secretion of the neurotrophic factor, insulin-like growth factor (IGF)-1. Pretreatment with TGF-β1 significantly inhibited all these changes caused by MPP⁺. Expression of microglial TβR-I was upregulated by TGF-β1. Silencing of the TβR-I gene in microglia abolished both the neuroprotective and anti-inflammatory properties of TGF-β1. TGF-β1 increased microglial p38 MAPK and Akt phosphorylation, both of which were blocked by the p38 inhibitor SB203580 and the PI3K inhibitor LY294002, respectively. Pretreatment of microglia with either SB203580 or LY294002 impaired the ability of TGF-β1 to inhibit MPP⁺-induced DAergic neuronal loss and microglial activation. These findings establish that TGF-β1 activates TβR-I and its downstream p38 MAPK and PI3K–Akt signaling pathways in microglia to protect against DAergic neuronal loss that characterizes in PD.