Microglia are the major cell type expressing complement C3a receptor (C3aR) in the brain. Using a knockin mouse line in which a Td-tomato reporter is incorporated into the endogenous C3ar1 locus, we identified 2 major subpopulations of microglia with differential C3aR expression. Expressing the Td-tomato reporter on the APPNL-G-F-knockin (APP-KI) background revealed a significant shift of microglia to a high-C3aR-expressing subpopulation and they were enriched around amyloid β (Aβ) plaques. Transcriptomic analysis of C3aR-positive microglia documented dysfunctional metabolic signatures, including upregulation of hypoxia-inducible factor 1 (HIF-1) signaling and abnormal lipid metabolism in APP-KI mice compared with wild-type controls. Using primary microglial cultures, we found that C3ar1-null microglia had lower HIF-1α expression and were resistant to hypoxia mimetic-induced metabolic changes and lipid droplet accumulation. These were associated with improved receptor recycling and Aβ phagocytosis. Crossing C3ar1-knockout mice with the APP-KI mice showed that C3aR ablation rescued the dysregulated lipid profiles and improved microglial phagocytic and clustering abilities. These were associated with ameliorated Aβ pathology and restored synaptic and cognitive function. Our studies identify a heightened C3aR/HIF-1α signaling axis that influences microglial metabolic and lipid homeostasis in Alzheimer disease, suggesting that targeting this pathway may offer therapeutic benefit.