Activation of microglial cells, the resident macrophages of the brain, occurs rapidly following brain injury. De-ramification, i.e., transformation from ramified into amoeboid morphology is one of the earliest manifestations of microglial activation. In the present study, we identified the physiological mechanisms underlying microglial de-ramification induced by lysophosphatidylcholine (LPC). Patch-clamp experiments revealed activation of non-selective cation currents and Ca2+-dependent K+ currents by extracellular LPC. LPC-activated non-selective cation channels were permeable for monovalent and divalent cations. They were inhibited by Gd3+, La3+, Zn2+ and Grammostola spatulata venom, but were unaffected by diltiazem, LOE908MS, amiloride and DIDS. Ca2+ influx through non-selective cation channels caused sustained increases in intracellular Ca2+ concentration. These Ca2+ increases were sufficient to elicit charybdotoxin-sensitive Ca2+-dependent K+ currents. However, increased [Ca2+]i was not required for LPC-induced morphological changes. In LPC-stimulated microglial cells, non-selective cation currents caused transient membrane depolarisation, which was followed by sustained membrane hyperpolarisation induced by Ca2+-dependent K+ currents. Furthermore, LPC elicited K+ efflux by stimulating electroneutral K+/Cl- co-transporters, which were inhibited by furosemide and DIOA. LPC-induced microglial de-ramification was prevented by simultaneous inhibition of non-selective cation channels and K+/Cl- co-transporters, suggesting their functional importance for microglial activation.