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Despite the fact that harboring the apolipoprotein E4 ( APOE4 ) allele represents the single greatest risk factor for late-onset Alzheimer’s disease (AD), the exact mechanism by which apoE4 contributes to disease progression remains unknown. Recently, we demonstrated that a 151 amino-terminal fragment of apoE4 (nApoE4 1-151 ) localizes within the nucleus of microglia in the human AD brain, suggesting a potential role in gene expression. In the present study, we investigated this possibility utilizing BV2 microglia cells treated exogenously with nApoE4 1-151 . The results indicated that nApoE4 1-151 leads to morphological activation of microglia cells through, at least in part, the downregulation of a novel ER-associated protein, CXorf56. Moreover, treatment of BV2 cells with nApoE4 1-151 resulted in a 68-fold increase in the expression of the inflammatory cytokine, TNF α , a key trigger of microglia activation. In this regard, we also observed a specific binding interaction of nApoE4 1-151 with the TNF α promoter region. Collectively, these data identify a novel gene-regulatory pathway involving CXorf56 that may link apoE4 to microglia activation and inflammation associated with AD.