Inflammation in the brain accompanies several high-impact neurological diseases including multiple sclerosis (MS), stroke, and Alzheimer’s disease. Neuroinflammation is sterile, as damage-associated molecular patterns rather than microbial pathogens elicit the response. The inflammasome, which leads to caspase-1 activation, is implicated in neuroinflammation. In this study, we reveal that lysophosphatidylcholine (LPC), a molecule associated with neurodegeneration and demyelination, elicits NLRP3 and NLRC4 inflammasome activation in microglia and astrocytes, which are central players in neuroinflammation. LPC-activated inflammasome also requires ASC (apoptotic speck containing protein with a CARD), caspase-1, cathepsin-mediated degradation, calcium mobilization, and potassium efflux but not caspase-11. To study the physiological relevance, Nlrc4^−/− and Nlrp3^−/− mice are studied in the cuprizone model of neuroinflammation and demyelination. Mice lacking both genes show the most pronounced reduction in astrogliosis and microglial accumulation accompanied by decreased expression of the LPC receptor G2A, whereas MS patient samples show increased G2A. These results reveal that NLRC4 and NLRP3, which normally form distinct inflammasomes, activate an LPC-induced inflammasome and are important in astrogliosis and microgliosis.