Human induced pluripotent stem cells (hiPSC) are widely used as a human development and disease model system. However, for the development of optimized disease models as platforms to uncover new drugs, human patient-derived iPSCs must effectively differentiate into cell states that faithfully recapitulate hallmarks of diseased cells and tissues. Lipopolysaccharide (LPS) is a potent activator of immune cells, including B cells, monocytes, macrophages, and other LPS-reactive cells like microglia and astrocytes. LPS can trigger the secretion of cytokines like interleukin-6 (IL-6), interleukin-1ꞵ (IL-1ꞵ), or TNF-α, the expression of inflammatory markers (HLA-DR, CD68), changes in cell morphology, and activation pathways to respond to the immune challenge. The mechanism behind LPS involves the activation of toll-like receptor 4 (TLR4) and nuclear factor kB (NFkB). Considering that LPS is a pro-inflammatory bacterial antigen widely used in the literature as an activation stimulus, this protocol describes the application of LPS to activate iPSC-derived microglia in vitro. We propose the use of LPS as a positive control for microglia activation assays (e.g., phagocytosis assay, cytokine production and secretion), and as a phenotyping tool to investigate disease-mutated microglia by comparing to disease-relevant stimuli. As an analysis endpoint, this protocol suggests two main readouts: morphology index and expression of inflammatory biomarkers in fixed cells, and measurement of IL-6 in cell culture media.