Alzheimer’s disease (AD) is a complex disorder involving multiple genetic and non-genetic factors leading to cognitive decline and the accumulation of protein aggregates. Recently, we found that the epi-genetic regulation of Peptidase M20 Domain Containing 1 (PM20D1) modulates AD risk in humans and disease progression in mice through a still unknown mechanism. PM20D1 is an enzyme that facilitates the conjugation of N-acyl amino acids (NAAAs). However, whether NAAAs exert similar protective effects in AD remains unknown. To investigate this hypothesis, we NAAA-treated a series of AD models, and measured related behavioral and molecular alterations using specific tests and immunoassays. We characterized cell-type-specific responses using single-nuclei RNA sequencing, and meta-analyzed resulting data using in-house developed pipelines. Our results suggest that NAAAs protect against AD. Mechanistically, they induce microglia association with amyloid plaques, reducing their size, number and toxicity, along with enhanced neuroprotection and cognition in AD mice. They also increase amyloid chemotaxis and clearance in microglia cultures and enhance cell viability in neurons subjected to AD-related stressors. Finally, we provide evidence for a NAAA-mediated microglia association with amyloid plaques and neuroprotection in human brains. In sum, our results provide mechanistic insight into the protective role of PM20D1 in AD and endorse the use of NAAAs as a potential microglia-modifying treatment for AD.