Upon exposure to amyloid-β oligomers (Aβ1-42), glial cells start expressing proinflammatory cytokines, despite an increase in levels of repressive microRNAs (miRNAs). Exploring the mechanism of this potential immunity of target cytokine mRNAs against repressive miRNAs in amyloid-β-exposed glial cells, we have identified differential compartmentalization of repressive miRNAs in glial cells that explains this aberrant miRNA function. In Aβ1-42-treated cells, whereas target mRNAs were found to be associated with polysomes attached to endoplasmic reticulum (ER), the miRNA ribonucleoprotein complexes (miRNPs) were found to be present predominantly with endosomes that failed to recycle to ER-attached polysomes, preventing repression of mRNA targets. Aβ1-42 oligomers, by masking Rab7a proteins on endosomal surfaces, affected Rab7a interaction with Rab-interacting lysosomal protein (RILP), restricting the lysosomal targeting and recycling of miRNPs. RNA-processing body (P-body) localization of the miRNPs was found to be enhanced in amyloid-β-treated cells as a consequence of enhanced endosomal retention of miRNPs. Interestingly, depletion of P-body components partly rescued the miRNA function in glial cells exposed to amyloid-β and restricted the excess cytokine expression. This article has an associated First Person interview with the first author of the paper.