Microglia, the brain's resident macrophages, can be reconstituted by surrogate cells - a process termed "microglia replacement." To expand the microglia replacement toolkit, we here introduce estrogen-regulated (ER) homeobox B8 (Hoxb8) conditionally immortalized macrophages, a cell model for generation of immune cells from murine bone marrow, as a versatile model for microglia replacement. We find that ER-Hoxb8 macrophages are highly comparable to primary bone marrow-derived (BMD) macrophages in vitro, and, when transplanted into a microglia-free brain, engraft the parenchyma and differentiate into microglia-like cells. Furthermore, ER-Hoxb8 progenitors are readily transducible by virus and easily stored as stable, genetically manipulated cell lines. As a demonstration of this system's power for studying the effects of disease mutations on microglia in vivo, we created stable, Adar1-mutated ER-Hoxb8 lines using CRISPR-Cas9 to study the intrinsic contribution of macrophages to Aicardi-Goutières Syndrome (AGS), an inherited interferonopathy that primarily affects the brain and immune system. We find that Adar1 knockout elicited interferon secretion and impaired macrophage production in vitro, while preventing brain macrophage engraftment in vivo - phenotypes that can be rescued with concurrent mutation of Ifih1 (MDA5) in vitro, but not in vivo. Lastly, we extended these findings by generating ER-Hoxb8 progenitors from mice harboring a patient-specific Adar1 mutation (D1113H). We demonstrated the ability of microglia-specific D1113H mutation to drive interferon production in vivo, suggesting microglia drive AGS neuropathology. In sum, we introduce the ER-Hoxb8 approach to model microglia replacement and use it to clarify macrophage contributions to AGS.