Microglia are brain resident immune cells that maintain proteostasis and cellular homeostasis. Recent findings suggest that microglia dysfunction could contribute to the pathogenesis of Parkinson's disease (PD). One of the hallmarks of PD is the aggregation and accumulation of alpha-synuclein (αSyn) into Lewy bodies inside nerve cells. Microglia may worsen the neuronal microenvironment by persistent inflammation, resulting in deficient clearing of aggregated αSyn. To model microglial behavior in PD, we utilized human induced pluripotent stem cells to generate functionally active microglia. We studied the microglial uptake of alpha-synuclein preformed fibrils (PFFs) and the effect of pro-inflammatory stimulation by interferon gamma. We demonstrate that combined exposure disrupts the phagosome maturation pathway while inflammatory stimuli suppress chaperone mediated autophagy and mitochondrial function. Furthermore, inflammatory stimulation impairs PFF uptake in microglia and increases cytokine production. Moreover, excessive PFF uptake by microglia results in induction of inducible nitric oxide synthase. Taken together, we demonstrate that this model is valuable for investigating the behavior of microglia in PD and provide new insights on how human microglia process aggregated αSyn.