Alzheimer's disease (AD) is an age-associated neurodegenerative disorder characterized by progressive neuronal loss and pathological accumulation of the misfolded proteins amyloid-β and tau1,2. Neuroinflammation mediated by microglia and brain-resident macrophages plays a crucial role in AD pathogenesis1-5, though the mechanisms by which age, genes, and other risk factors interact remain largely unknown. Somatic mutations accumulate with age and lead to clonal expansion of many cell types, contributing to cancer and many non-cancer diseases6,7. Here we studied somatic mutation in normal aged and AD brains by three orthogonal methods and in three independent AD cohorts. Analysis of bulk RNA sequencing data from 866 samples from different brain regions revealed significantly higher (~two-fold) overall burdens of somatic single-nucleotide variants (sSNVs) in AD brains compared to age-matched controls. Molecular-barcoded deep (>1000X) gene panel sequencing of 311 prefrontal cortex samples showed enrichment of sSNVs and somatic insertions and deletions (sIndels) in cancer driver genes in AD brain compared to control, with recurrent, and often multiple, mutations in genes implicated in clonal hematopoiesis (CH)8,9. Pathogenic sSNVs were enriched in CSF1R+ microglia of AD brains, and the high proportion of microglia (up to 40%) carrying some sSNVs in cancer driver genes suggests mutation-driven microglial clonal expansion (MiCE). Analysis of single-nucleus RNA sequencing (snRNAseq) from temporal neocortex of 62 additional AD cases and controls exhibited nominally increased mosaic chromosomal alterations (mCAs) associated with CH10,11. Microglia carrying mCA showed upregulated pro-inflammatory genes, resembling the transcriptomic features of disease-associated microglia (DAM) in AD. Our results suggest that somatic driver mutations in microglia are common with normal aging but further enriched in AD brain, driving MiCE with inflammatory and DAM signatures. Our findings provide the first insights into microglial clonal dynamics in AD and identify potential new approaches to AD diagnosis and therapy.