Transient receptor potential vanilloid 1 (TRPV1), a canonical non-selective cation channel predominantly expressed on the cellular membrane of peripheral sensory neurons, is responsible for perceiving physical and chemical stimuli. Accumulating evidence indicates TRPV1 expression in the central nervous system, the role of which remains elusive. Here, we demonstrate that, distinct from neurons or astrocytes, TRPV1 is distributed on the mitochondrial membrane of microglia in the hippocampus, mediating neurotoxic microglial responses during both acute and convalescent stages of sepsis by disrupting mitochondrial dynamics. During the pathogenesis of sepsis-associated encephalopathy (SAE), hippocampal microglia exhibit elevated TRPV1 expression concurrent with a pro-inflammatory state. Genetic ablation of TRPV1 or application of TRPV1 antagonist attenuates microglial inflammatory polarization and phagocytic dysfunction both in vivo and in vitro. This mitigates immoderate neuroinflammation and aberrant synaptic pruning, thereby reshaping synaptic plasticity and ameliorating cognitive deficits in SAE. Mechanistically, TRPV1 reprograms microglial phenotype with dysregulated capability for glycometabolism by affecting their mitochondrial function. Following LPS challenge, TRPV1 activation exacerbates mitochondrial damage and impairs ATP production in microglia, resulting in bioenergetic failure and excessive generation of mitochondrial reactive oxygen species (mtROS) and mtDNA. Conversely, TRPV1 depletion enhances oxidative phosphorylation capacity of microglia to counteract LPS toxicity. TRPV1 silencing further promotes the formation of cristae-deficient mitochondria, sustaining reductive proline biosynthesis and shifting microglia toward a protective pattern. Collectively, our findings suggest that TRPV1 compromises the metabolic reprogramming of microglia by perturbing mitochondrial dynamics, revealing a novel therapeutic target for SAE intervention.