Forms a receptor signaling complex with TYROBP which mediates signaling and cell activation following ligand binding (PubMed:11241283). Acts as a receptor for amyloid-beta protein 42, a cleavage product of the amyloid-beta precursor protein APP, and mediates its uptake and degradation by microglia (PubMed:27477018, PubMed:29518356). Binding to amyloid-beta 42 mediates microglial activation, proliferation, migration, apoptosis and expression of pro-inflammatory cytokines, such as IL6R and CCL3, and the anti-inflammatory cytokine ARG1 (PubMed:27477018, PubMed:29518356). Acts as a receptor for lipoprotein particles such as LDL, VLDL, and HDL and for apolipoproteins such as APOA1, APOA2, APOB, APOE, APOE2, APOE3, APOE4, and CLU and enhances their uptake in microglia (PubMed:27477018). Binds phospholipids (preferably anionic lipids) such as phosphatidylserine, phosphatidylethanolamine, phosphatidylglycerol and sphingomyelin (By similarity). Regulates microglial proliferation by acting as an upstream regulator of the Wnt/beta-catenin signaling cascade (PubMed:28077724). Required for microglial phagocytosis of apoptotic neurons (PubMed:24990881). Also required for microglial activation and phagocytosis of myelin debris after neuronal injury and of neuronal synapses during synapse elimination in the developing brain (PubMed:15728241, PubMed:28592261, PubMed:29752066, PubMed:25631124). Regulates microglial chemotaxis and process outgrowth, and also the microglial response to oxidative stress and lipopolysaccharide (PubMed:30232263, PubMed:29663649, PubMed:28483841, PubMed:29859094). It suppresses PI3K and NF-kappa-B signaling in response to lipopolysaccharide; thus promoting phagocytosis, suppressing pro-inflammatory cytokine and nitric oxide production, inhibiting apoptosis and increasing expression of IL10 and TGFB (PubMed:29663649). During oxidative stress, it promotes anti-apoptotic NF-kappa-B signaling and ERK signaling (PubMed:28592261). Plays a role in microglial MTOR activation and metabolism (PubMed:28802038). Regulates age-related changes in microglial numbers (PubMed:30548312, PubMed:29752066, PubMed:25631124). Triggers activation of the immune responses in macrophages and dendritic cells (By similarity). Mediates cytokine-induced formation of multinucleated giant cells which are formed by the fusion of macrophages (PubMed:18957693). In dendritic cells, it mediates up-regulation of chemokine receptor CCR7 and dendritic cell maturation and survival (By similarity). Involved in the positive regulation of osteoclast differentiation (PubMed:16418779). Monomer (By similarity). After ectodomain shedding, the extracellular domain oligomerizes, which is enhanced and stabilized by binding of phosphatidylserine (By similarity). Interacts with TYROBP/DAP12 (PubMed:11241283, PubMed:29518356). Interaction with TYROBP is required for stabilization of the TREM2 C-terminal fragment (TREM2-CTF) which is produced by proteolytic processing (By similarity). Expressed in the brain, specifically in microglia (at protein level) (PubMed:15728241, PubMed:28802038, PubMed:28855301, PubMed:28077724, PubMed:28592261, PubMed:29794134, PubMed:29752066, PubMed:27477018, PubMed:28559417). Expressed in macrophages (at protein level) (PubMed:11241283, PubMed:28802038, PubMed:28559417). Expressed at higher levels in the CNS, heart and lung than in lymph nodes or in other non-lymphoid tissues such as kidney, liver and testis (PubMed:12472885). In the CNS not all microglia express TREM2 (PubMed:12472885). Brain regions with an incomplete blood-brain barrier had the lowest percentages of TREM2 expressing microglia, whereas the lateral entorhinal and cingulate cortex had the highest percentages (PubMed:12472885). Expression is increased during oxygen-glucose deprivation, reaching the highest expression level 12 hours after reoxygenation. Expression is also increased by ischemia, where maximum expression is reached 7 days after ischemic conditions. Undergoes ectodomain shedding through proteolytic cleavage by ADAM10 and ADAM17 to produce a transmembrane segment, the TREM2 C-terminal fragment (TREM2-CTF), which is subsequently cleaved by gamma-secretase. Mice exhibit a strong increase in self-grooming behavior, defective social behavior, and some sensorimotor defects (PubMed:25631124, PubMed:29752066). Aged mice show decreases in age-related neuronal loss and increases in synaptic density in the substantia nigra and the hippocampus (PubMed:30548312). They also exhibit a decrease in the connectivity between the retrosplenial cortices, subiculum, hippocampus and anterior cingulate, as a result of defective synaptic growth thus impairing their function (PubMed:29752066).