Sleep has an essential role for optimal brain function, but the cellular substrates for sleep regulation are not fully understood. Microglia, the immune cells of the brain, have gained increasingly more attention over the last two decades for their important roles in various brain functions that extend beyond their well-known immune function, including brain development, neuronal protection, and synaptic plasticity. Here we review recent advances in understanding: i) morphological and phenotypic dynamics of microglia including process motility/growth and gene/protein expression, and ii) microglia-neuron interactions including phagocytosis and contact at synapses which alters neuronal circuit activity, both under physiological state in the adult brain. We discuss how the microglia-neuron interactions particularly at synapses could influence microglia and neuronal activities across circadian cycles and sleep/wake states. We also review recent findings on how microglia respond to sleep loss. We conclude by pointing out key questions and proposing suggestions for future research to better understand the role of microglia in sleep regulation, sleep homeostasis, and the function of sleep.