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Macrophages and microglia play important roles in chronic neuroinflammation following spinal cord injury (SCI). Although macrophages and microglia have similar functions, their phagocytic and homeostatic abilities differ. It is difficult to distinguish between these two populations in vivo, but single-cell analysis can improve our understanding of their identity and heterogeneity. We conducted bioinformatics analysis of the single-cell RNA sequencing dataset GSE159638, identifying apolipoprotein E (APOE) as a hub gene in both macrophages and microglia in the subacute and chronic phases of SCI. We then validated these transcriptomic changes in a mouse model of cervical spinal cord hemi-contusion and observed myelin uptake, lipid droplets, and lysosome accumulation in macrophages and microglia following SCI. Finally, we observed that knocking out APOE aggravated neurological dysfunction, increased neuroinflammation, and exacerbated the loss of white matter. Targeting APOE and the related cholesterol efflux represents a promising strategy for reducing neuroinflammation and promoting recovery following SCI.