Human genetic studies have linked rare coding variants in microglial genes, such as TREM2, and more recently PLCG2 to Alzheimer’s disease (AD) pathology. The P522R variant in PLCG2 has been shown to confer protection for AD and to result in a subtle increase in enzymatic activity. PLCγ2 is a key component of intracellular signal transduction networks and induces Ca2+ signals downstream of many myeloid cell surface receptors, including TREM2. To explore the relationship between PLCγ2 and TREM2 and the role of PLCγ2 in regulating immune cell function, we generated human induced pluripotent stem cell (iPSC)- derived macrophages from isogenic lines with homozygous PLCG2 knockout (Ko). Stimulating TREM2 signalling using a polyclonal antibody revealed a complete lack of calcium flux and IP1 accumulation in PLCγ2 Ko cells, demonstrating a non-redundant role of PLCγ2 in calcium release downstream of TREM2. Loss of PLCγ2 led to broad changes in expression of several macrophage surface markers and phenotype, including reduced phagocytic activity and survival, while LPS-induced secretion of the inflammatory cytokines TNFα and IL-6 was unaffected. We identified additional deficits in PLCγ2- deficient cells that compromised cellular adhesion and migration. Thus, PLCγ2 is key in enabling divergent cellular functions and might be a promising target to increase beneficial microglial functions.