Multiple sclerosis (MS) is a chronic inflammatory disease of the central nervous system (CNS) leading to demyelination and axonal damage. It often affects young adults and can lead to neurological disability. Interferon β (IFNβ) preparations represent widely used treatment regimens for patients with relapsing-remitting MS (RRMS) with therapeutic efficacy in reducing disease progression and frequency of acute exacerbations. In mice, IFNβ therapy has been shown to ameliorate experimental autoimmune encephalomyelitis (EAE), an animal model of MS while genetic deletion of IFNβ or its receptor augments clinical severity of disease. However, the complex mechanism of action of IFNβ in CNS autoimmunity has not been fully elucidated. Here, we review our current understanding of the origin, phenotype, and function of microglia and CNS immigrating macrophages in the pathogenesis of MS and EAE. In addition, we highlight the emerging roles of microglia as IFNβ-producing cells and vice versa the impact of IFNβ on microglia in CNS autoimmunity. We finally discuss recent progress in unraveling the underlying molecular mechanisms of IFNβ-mediated effects in EAE.