Sorting protein-related receptor containing class A repeats (SORLA) is an intracellular trafficking receptor encoded by the Alzheimer's disease (AD) gene SORL1 (sortilin-related receptor 1). Recent findings argue that altered expression in microglia may underlie the genome-wide risk of AD seen with some SORL1 gene variants, however, the functional significance of the receptor in microglia remains poorly explained. Using unbiased omics and targeted functional analyses in iPSC-based human microglia, we identified a crucial role for SORLA in sensitizing microglia to pro-inflammatory stimuli. We show that SORLA acts as a sorting factor for the pattern recognition receptor CD14, directing CD14 exposure on the cell surface and priming microglia to stimulation by pro-inflammatory factors. Loss of SORLA in gene-targeted microglia impairs proper CD14 sorting and blunts pro-inflammatory responses. Our studies indicate an important role for SORLA in shaping the inflammatory brain milieu, a biological process important to local immune responses in AD.