ABSTRACT Microglia, the brain’s resident immune cells, have been implicated in important brain functions, such as synaptic transmission and plasticity. The pro-inflammatory cytokine tumor necrosis factor α (TNFα), which is produced and secreted by microglia, has been linked to the expression of synaptic plasticity in neurons. However, the role of TNFα-mediated activation of microglia has not been addressed in this context. Here, we assessed concentration-dependent effects of TNFα on the balance of synaptic excitation/inhibition and the activation of microglia using mouse organotypic entorhino-hippocampal tissue cultures. We found that low concentrations of TNFα enhanced excitatory synaptic strength while not affecting inhibitory neurotransmission. At higher concentrations, TNFα increased inhibitory neurotransmission without affecting excitatory synaptic strength. Both low and high concentrations of TNFα induced the synaptic accumulation of GluA1-containing AMPA receptors, suggesting that a high concentration of TNFα exerts a homeostatic effect on excitatory neurotransmission that prevents synaptic strengthening. Consistent with this, high, but not low, concentrations of TNFα activated microglia. Moreover, high concentrations of TNFα enhanced excitatory neurotransmission in microglia-depleted tissue cultures. These findings extend our knowledge on the role of TNFα on synaptic plasticity by demonstrating concentration-dependent effects on excitatory and inhibitory neurotransmission. They reveal a TNFα-mediated negative feedback mechanism on excitatory neurotransmission that is dependent on the activation of microglia, thereby emphasizing their role as gatekeepers of TNFα-mediated plasticity and homeostasis.