APOE is the strongest genetic risk factor for late-onset Alzheimer's disease. ApoE exacerbates tau-associated neurodegeneration by driving microglial activation. However, how apoE regulates microglial activation and whether targeting apoE is therapeutically beneficial in tauopathy is unclear. Here, we show that overexpressing an apoE metabolic receptor, LDLR (low-density lipoprotein receptor), in P301S tauopathy mice markedly reduces brain apoE and ameliorates tau pathology and neurodegeneration. LDLR overexpression (OX) in microglia cell-autonomously downregulates microglial Apoe expression and is associated with suppressed microglial activation as in apoE-deficient microglia. ApoE deficiency and LDLR OX strongly drive microglial immunometabolism toward enhanced catabolism over anabolism, whereas LDLR-overexpressing microglia also uniquely upregulate specific ion channels and neurotransmitter receptors upon activation. ApoE-deficient and LDLR-overexpressing mice harbor enlarged pools of oligodendrocyte progenitor cells (OPCs) and show greater preservation of myelin integrity under neurodegenerative conditions. They also show less reactive astrocyte activation in the setting of tauopathy.