Propofol is an established anesthetic widely used for induction and maintenance of anesthesia. We investigated propofol for its anti-inflammatory effects on microglia and found that propofol treatment is associated with substantial lower levels of extracellular vesicles (EVs) in immune activated microglia. Importantly, EVs collected from immune activated microglia reversed propofol-mediated anti-inflammatory and neuroprotective effects, suggesting that propofol reduces proinflammatory microglia activation and microglia-mediated neurotoxicity through inhibition of EV release. These data shed new insight into a novel molecular mechanism of propofol-mediated neuroprotective and immunomodulatory effects through inhibition of EV release.