ABSTRACT: TREM2 is a microglial cell surface receptor, with risk mutations linked to Alzheimer’s disease (AD), including R47H. TREM2 signalling via SYK aids phagocytosis, chemotaxis, survival, and changes to microglial activation state. In AD mouse models, knockout (KO) of TREM2 impairs microglial clustering around amyloid, and prevents microglial activation. The R47H mutation is proposed to reduce TREM2 ligand binding. We investigated cell phenotypes of the R47H mutant and TREM2 KO in a model of human microglia, and compared their transcriptional signatures, to determine the mechanism by which R47H TREM2 disrupts function. We generated human microglia-like iPSC-macrophages (pMac) from isogenic induced pluripotent stem cell (iPSC) lines, with homozygous R47H mutation or TREM2 knockout (KO). We firstly validated the effect of the R47H mutant on TREM2 surface and subcellular localization in pMac. To assess microglial phenotypic function we measured phagocytosis of dead neurons, cell morphology, directed migration, survival, and LPS-induced inflammation. We performed bulk RNA-seq, comparing significant differentially-expressed genes (DEGs: p<0.05) between the R47H and KO versus WT, and bioinformatically predicted potential upstream regulators of TREM2-mediated gene expression. Altered gene expression in the R47H TREM2 pMac overlapped by 90% with the TREM2 KO, and was characterized by dysregulation of genes involved with immunity, proliferation, activation, chemotaxis and adhesion. Downregulated mediators of ECM adhesion included the vitronectin receptor αVβ3, and consequently R47H TREM2 pMac adhered weakly to vitronectin compared with WT pMac. To counteract these transcriptional defects, we investigated TGFβ1, as a candidate upstream regulator. TGFβ1 failed to rescue vitronectin adhesion of pMac, although improved αVβ3 expression. The R47H mutation is not sufficient to cause gross phenotypic defects of human pMac under standard culture conditions. However, overlapping transcriptional defects with TREM2 KO supports the hypothesised partial loss-of-function effects of the R47H mutation. Furthermore, transcriptomics can guide us to more subtle phenotypic defects in the R47H cells, such as reduced cell adhesion, and can be used to predict targets for therapeutic intervention.