Tumor-necrosis-factor-alpha-induced protein 3 (TNFAIP3), or A20, is a ubiquitin-modifying protein and negative regulator of canonical nuclear factor κB (NF-κB) signaling. Several single-nucleotide polymorphisms in TNFAIP3 are associated with autoimmune diseases, suggesting a role in tissue inflammation. While the role of A20 in peripheral immune cells has been well investigated, less is known about its role in the central nervous system (CNS). Here, we show that microglial A20 is crucial for maintaining brain homeostasis. Without microglial A20, CD8+ T cells spontaneously infiltrate the CNS and acquire a viral response signature. The combination of infiltrating CD8+ T cells and activated A20-deficient microglia leads to an increase in VGLUT1+ terminals and frequency of spontaneous excitatory currents. Ultimately, A20-deficient microglia upregulate genes associated with the antiviral response and neurodegenerative diseases. Together, our data suggest that microglial A20 acts as a sensor for viral infection and a master regulator of CNS homeostasis.