While ATM loss of function has long been identified as the genetic cause of ataxia-telangiectasia (A-T), how it leads to selective and progressive degeneration of cerebellar Purkinje and granule neurons remains unclear. ATM expression is enriched in microglia throughout cerebellar development and adulthood. Here, we find evidence of microglial inflammation in the cerebellum of patients with A-T using single-nucleus RNA sequencing. Pseudotime analysis revealed that activation of A-T microglia preceded upregulation of apoptosis-related genes in granule and Purkinje neurons and that microglia exhibited increased neurotoxic cytokine signaling to granule and Purkinje neurons in A-T. To confirm these findings experimentally, we performed transcriptomic profiling of A-T induced pluripotent stem cell (iPSC)-derived microglia, which revealed cell-intrinsic microglial activation of cytokine production and innate immune response pathways compared to controls. Furthermore, A-T microglia co-culture with either control or A-T iPSC-derived neurons was sufficient to induce cytotoxicity. Taken together, these studies reveal that cell-intrinsic microglial activation may promote neurodegeneration in A-T.