A complex therapeutic challenge for Alzheimer's disease (AD) is minimizing deleterious aspects of microglial activation while maximizing beneficial actions, including phagocytosis/clearance of amyloid beta (Abeta) peptides. One potential target is selective suppression of microglial prostaglandin E(2) receptor subtype 2 (EP2) function, which influences microglial phagocytosis and elaboration of neurotoxic cytokines. To test this hypothesis, we transplanted bone marrow cells derived from wild-type mice or mice homozygous deficient for EP2 (EP2(-/-)) into lethally irradiated 5-month-old wild-type or APPswe-PS1DeltaE9 double transgenic AD mouse model recipients. We found that cerebral engraftment by bone marrow transplant (BMT)-derived wild-type or EP2(-/-) microglia was more efficient in APPswe-PS1DeltaE9 than in wild-type mice, and APPswe-PS1DeltaE9 mice that received EP2(-/-) BMT had increased cortical microglia compared with APPswe-PS1DeltaE9 mice that received wild-type BMT. We found that myeloablative irradiation followed by bone marrow transplant-derived microglia engraftment, rather than cranial irradiation or BMT alone, was responsible for the approximate one-third reduction in both Abeta plaques and potentially more neurotoxic soluble Abeta species. An additional 25% reduction in cerebral cortical Abeta burden was achieved in mice that received EP2(-/-) BMT compared with mice that received wild-type BMT. Our results provide a foundation for an adult stem cell-based therapy to suppress soluble Abeta peptide and plaque accumulation in the cerebrum of patients with AD.