Microglia are one of the major glial cell types within the central nervous system, and can function as immune effector cells upon activation. CD40 is a cell surface receptor belonging to the TNF receptor family that plays a critical role in the regulation of immune responses. In this study, we investigated the expression of CD40 on microglia, and the role of transforming growth factor-β (TGF-β), an immunosuppressive cytokine, in regulating CD40 expression. Microglia constitutively express very low levels of CD40, and IFN-γ enhances CD40 mRNA and protein expression in these cells. IFN-γ-induced CD40 mRNA expression is partially sensitive to the protein synthesis inhibitor puromycin, suggesting that ongoing protein synthesis is necessary for optimal induction of CD40 mRNA by IFN-γ. TGF-β inhibits IFN-γ-induced CD40 protein and mRNA expression. Inhibition of IFN-γ-induced CD40 mRNA levels by TGF-β in microglia is not due to inhibition of CD40 transcription; rather, inhibition is due to enhanced degradation of CD40 mRNA. These results indicate that TGF-β can inhibit expression of an immunologically important receptor, CD40, in microglia, and does so at the post-transcriptional level by destabilizing CD40 mRNA. TGF-β inhibition of CD40 expression may be one of the mechanisms by which TGF-β exerts its suppressive effects on immune responses.