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Altered microglial states affect neuroinflammation, neurodegeneration, and disease but remain poorly understood. Here, we report 194,000 single-nucleus microglial transcriptomes and epigenomes across 443 human subjects and diverse Alzheimer's disease (AD) pathological phenotypes. We annotate 12 microglial transcriptional states, including AD-dysregulated homeostatic, inflammatory, and lipid-processing states. We identify 1,542 AD-differentially-expressed genes, including both microglia-state-specific and disease-stage-specific alterations. By integrating epigenomic, transcriptomic, and motif information, we infer upstream regulators of microglial cell states, gene-regulatory networks, enhancer-gene links, and transcription-factor-driven microglial state transitions. We demonstrate that ectopic expression of our predicted homeostatic-state activators induces homeostatic features in human iPSC-derived microglia-like cells, while inhibiting activators of inflammation can block inflammatory progression. Lastly, we pinpoint the expression of AD-risk genes in microglial states and differential expression of AD-risk genes and their regulators during AD progression. Overall, we provide insights underlying microglial states, including state-specific and AD-stage-specific microglial alterations at unprecedented resolution.