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Circulating monocytes can compete for virtually any tissue macrophage niche and become long-lived replacements that are phenotypically indistinguishable from their embryonic counterparts. As the factors regulating this process are incompletely understood, we studied niche competition in the brain by depleting microglia with >95% efficiency using Cx3cr1^CreER/+R26^DTA/+ mice and monitored long-term repopulation. Here we show that the microglial niche is repopulated within weeks by a combination of local proliferation of CX3CR1⁺F4/80^lowClec12a^– microglia and infiltration of CX3CR1⁺F4/80^hiClec12a⁺ macrophages that arise directly from Ly6C^hi monocytes. This colonization is independent of blood brain barrier breakdown, paralleled by vascular activation, and regulated by type I interferon. Ly6C^hi monocytes upregulate microglia gene expression and adopt microglia DNA methylation signatures, but retain a distinct gene signature from proliferating microglia, displaying altered surface marker expression, phagocytic capacity and cytokine production. Our results demonstrate that monocytes are imprinted by the CNS microenvironment but remain transcriptionally, epigenetically and functionally distinct.