In dry age-related macular degeneration (AMD), inflammation plays a key role in disease pathogenesis. Innate immune cells such as microglia and neutrophils infiltrate the sub-retinal space (SRS) to induce chronic inflammation and AMD progression. But a major gap in our understanding is how these cells interact with each other in AMD. Here, we report a novel concept of how dynamic interactions between microglia and neutrophils contribute to AMD pathology. Using well-characterized genetically engineered mouse models as tools, we show that in the diseased state, retinal pigmented epithelial (RPE) cells trigger pro-inflammatory (M1) transition in microglia with diminished expression of the homeostatic marker, CX3CR1. Activated microglia localize to the SRS and regulate local neutrophil function, triggering their activation and thereby inducing early RPE changes. Ligand receptor (LR)-loop analysis and cell culture studies revealed that M1 microglia also induce the expression of neutrophil adhesion mediators (integrin β1/α4) through their interaction with CD14 on microglia. Furthermore, microglia-induced neutrophil activation and subsequent neutrophil-mediated RPE alterations were mitigated by inhibiting Akt2 in microglia. These results suggest that the Akt2 pathway in microglia drives M1 microglia-mediated neutrophil activation, thereby triggering early RPE degeneration and is a novel therapeutic target for early AMD, a stage without treatment options.