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In the brain, microglia are continuously exposed to a dynamic microenvironment throughout life, requiring them to adapt accordingly to specific developmental or disease-related demands. The advent of single-cell sequencing technologies has revealed the diversity of microglial transcriptional states. In this review, we explore the various contexts that drive transcriptional diversity in microglia and assess the extent to which non-homeostatic conditions induce context-specific signatures. We discuss our current understanding and knowledge gaps regarding the relationship between transcriptional states and microglial function, review the influence of complex microenvironments and prior experiences on microglial state induction, and highlight strategies to bridge the gap between mouse and human studies to advance microglia-targeting therapeutics.