Inflammation-mediated neurodegeneration occurs in the acute and the chronic phases of multiple sclerosis (MS) and its animal model, experimental autoimmune encephalomyelitis (EAE). Classically activated (M1) microglia are key players mediating this process. Here, we identified Galectin-1 (Gal1), an endogenous glycan-binding protein, as a pivotal regulator of M1 microglial activation that targets the activation of p38MAPK-, CREB-, and NF-κB-dependent signaling pathways and hierarchically suppresses downstream proinflammatory mediators, such as iNOS, TNF, and CCL2. Gal1 bound to core 2 O-glycans on CD45, favoring retention of this glycoprotein on the microglial cell surface and augmenting its phosphatase activity and inhibitory function. Gal1 was highly expressed in the acute phase of EAE, and its targeted deletion resulted in pronounced inflammation-induced neurodegeneration. Adoptive transfer of Gal1-secreting astrocytes or administration of recombinant Gal1 suppressed EAE through mechanisms involving microglial deactivation. Thus, Gal1-glycan interactions are essential in tempering microglial activation, brain inflammation, and neurodegeneration, with critical therapeutic implications for MS.