Microglia play diverse pathophysiological roles in Alzheimer's disease (AD), with genetic susceptibility factors skewing microglial cell function to influence AD risk. CD33 is an immunomodulatory receptor associated with AD susceptibility through a single nucleotide polymorphism that modulates mRNA splicing, skewing protein expression from a long protein isoform (CD33M) to a short isoform (CD33m). Understanding how human CD33 isoforms differentially impact microglial cell function in vivo has been challenging due to functional divergence of CD33 between mice and humans. We address this challenge by studying transgenic mice expressing either of the human CD33 isoforms crossed with the 5XFAD mouse model of amyloidosis and find that human CD33 isoforms have opposing effects on the response of microglia to amyloid-β (Aβ) deposition. Mice expressing CD33M have increased Aβ levels, more diffuse plaques, fewer disease-associated microglia, and more dystrophic neurites compared to 5XFAD control mice. Conversely, CD33m promotes plaque compaction and microglia-plaque contacts, and minimizes neuritic plaque pathology, highlighting an AD protective role for this isoform. Protective phenotypes driven by CD33m are detected at an earlier timepoint compared to the more aggressive pathology in CD33M mice that appears at a later timepoint, suggesting that CD33m has a more prominent impact on microglia cell function at earlier stages of disease progression. In addition to divergent roles in modulating phagocytosis, scRNAseq and proteomics analyses demonstrate that CD33m+ microglia upregulate nestin, an intermediate filament involved in cell migration, at plaque contact sites. Overall, our work provides new functional insights into how CD33, as a top genetic susceptibility factor for AD, modulates microglial cell function.