The expression of some proteins in the autophagy pathway declines with age, which may impact neurodegeneration in diseases, including Alzheimer’s Disease. We have identified a novel non-canonical function of several autophagy proteins in the conjugation of LC3 to Rab5+, clathrin+ endosomes containing β-amyloid in a process of LC3-associated endocytosis (LANDO). We found that LANDO in microglia is a critical regulator of immune-mediated aggregate removal and microglial activation in a murine model of AD. Mice lacking LANDO but not canonical autophagy in the myeloid compartment or specifically in microglia have a robust increase in pro-inflammatory cytokine production in the hippocampus and increased levels of neurotoxic β-amyloid. This inflammation and β-amyloid deposition were associated with reactive microgliosis and tau hyperphosphorylation. LANDO-deficient AD mice displayed accelerated neurodegeneration, impaired neuronal signaling, and memory deficits. Our data support a protective role for LANDO in microglia in neurodegenerative pathologies resulting from β-amyloid deposition.