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Microglia have emerged as key players in the pathogenesis of neurodegenerative conditions such as Alzheimer’s disease (AD). In response to CNS stimuli, these cells adopt distinct transcriptional and functional subtypes known as states. However, an understanding of the function of these states has been elusive, especially in human microglia, due to lack of tools to model and manipulate this cell-type. Here, we provide a platform for modeling human microglia transcriptional states in vitro. Using single-cell RNA sequencing, we found that exposure of human stem-cell differentiated microglia (iMGLs) to brain-related challenges generated extensive transcriptional diversity which mapped to gene signatures identified in human brain microglia. We identified two in vitro transcriptional clusters that were analogous to human and mouse disease-associated microglia (DAMs), a state enriched in neurodegenerative disease contexts. To facilitate scalable functional analyses, we established a lentiviral approach enabling broad and highly efficient genetic transduction of microglia in vitro. Using this new technology, we demonstrated that MITF (Melanocyte Inducing Transcription Factor), an AD-enriched transcription factor in microglia, drives both a disease-associated transcriptional signature and a highly phagocytic state. Finally, we confirmed these results across iMGLs differentiated from multiple iPSC lines demonstrating the broad utility of this platform. Together, these tools provide a comprehensive resource that enables the manipulation and functional interrogation of human microglial states in both homeostatic and disease-relevant contexts.