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Genome-Wide Association Studies revealed the TREM2 R47H variant as one of the strongest genetic risk factors for late-onset Alzheimer’s Disease (AD). Unfortunately, many current TREM2*R47H mouse models are associated with cryptic mRNA splicing of the mutant allele that produces a confounding reduction in protein product. We have developed the Trem2R47H NSS (Normal Splice Site) mouse model where the Trem2 allele is expressed at a similar level to the wild-type Trem2 allele, without evidence of cryptic splicing products, and appropriate inflammatory responses to cuprizone challenge. Utilizing the 5xFAD mouse model, we report age- and disease-dependent changes in response to pathology. At an early disease stage (4 mo), homozygous Trem2R47H NSS; hemizygous 5xFAD (Trem2R47H NSS ; 5xFAD) mice have reduced size and number of microglia plus impaired interaction with plaques, that is associated with increased dystrophic neurites and axonal damage detected through plasma neurofilament light chain (NfL) level and suppressed inflammation. However, homozygosity for Trem2R47H NSS suppressed LTP deficits and presynaptic puncta loss caused by the 5xFAD transgene array. At a more advanced disease stage (12 mo,) Trem2R47H NSS ; 5xFAD mice no longer display impaired plaque-microglia interaction or suppressed inflammatory gene expression, although NfL levels remain elevated, and a unique interferon-related gene expression signature is seen. Furthermore, Trem2R47H NSS ; 5xFAD mice also display robust LTP deficits and exacerbated presynaptic loss. Collectively, we provide a Trem2R47H variant mouse without cryptic splicing, and demonstrate it has disease stage dependent effects when combined with a plaque bearing model, with an initial loss of function that ultimately resolves, giving rise to a unique interferon signature and associated tissue damage.