Aging is the greatest known risk factor for most neurodegenerative diseases. Myelin degeneration is an early pathological indicator of these diseases and a normal part of aging; albeit, to a lesser extent. Despite this, little is known about the contribution of age-related myelin degeneration on neurodegenerative disease. Microglia participate in modulating white matter events from demyelination to remyelination, including regulation of (de)myelination by the microglial innate immune receptor triggering receptor expressed on myeloid cells 2 (TREM2). Here, we demonstrate Trem2-deficiency aggravates and accelerates age-related myelin degeneration in the striatum. We show TREM2 is necessary for remyelination by recruiting reparative glia and mediating signaling that promotes OPC differentiation/maturation. In response to demyelination, TREM2 is required for phagocytosis of large volumes of myelin debris. In addition to lysosomal regulation, we show TREM2 can modify the ER stress response, even prior to overt myelin debris, that prevents lipid accumulation and microglial dysfunction. These data support a role for Trem2-dependent interactions in age-related myelin degeneration and suggest a basis for how early dysfunctional microglia could contribute to disease pathology through insufficent repair, defective phagocytosis, and the ER stress response.