Temporal lobe epilepsy (TLE), the most common form of epilepsy, is primarily characterized by hippocampal sclerosis (HS). Microglia reactivity is a critical component of TLE pathogenesis, and apolipoprotein E (APOE) may be a potential mediator of these processes. However, its role in TLE progression remains unclear. Bioinformatics approaches with biomarker validation are integrated to elucidate APOE's role and hippocampal microglia in the mechanisms underlying TLE. APOE expression is significantly elevated in the hippocampal tissues of patients with TLE-HS and in TLE mouse models. Single-cell RNA sequencing reveals a subset of microglia with high APOE gene expression, which serves as the principal carrier of increased APOE during disease progression. Bioinformatic analyses, in vitro studies, and in vivo functional experiments utilizing TLE mouse models implicate these APOE-expressing microglia in regulating microglial differentiation, promoting neuroinflammation, neuronal apoptosis, and enhancing neuronal excitability. Genetic knockout of APOE mitigates gliosis, neuronal cell death, and seizure frequency in the hippocampus of epileptic mice. Additionally, APOE expression primarily induces significant alterations in glycerophospholipid metabolism and its associated metabolic derivatives within the epileptic microenvironment. Overall, APOE-expressing microglia are pivotal drivers of HS and TLE progression, positioning APOE and its downstream signaling pathways as promising therapeutic TLE targets.