Breakdown of lipid homeostasis is thought to contribute to pathological aging, the largest risk factor for neurodegenerative disorders such as Alzheimer's Disease (AD). Cognitive reserve theory posits a role for compensatory mechanisms in the aging brain in preserving neuronal circuit functions, staving off cognitive decline, and mitigating risk for AD. However, the identities of such mechanisms have remained elusive. A screen for hippocampal dentate granule cell (DGC) synapse loss-induced factors identified a secreted phospholipase, Pla2g2f, whose expression increases in DGCs during aging. Pla2g2f deletion in DGCs exacerbates aging-associated pathophysiological changes including synapse loss, inflammatory microglia, reactive astrogliosis, impaired neurogenesis, lipid dysregulation and hippocampal-dependent memory loss. Conversely, boosting Pla2g2f in DGCs during aging is sufficient to preserve synapses, reduce inflammatory microglia and reactive gliosis, prevent hippocampal-dependent memory impairment and modify trajectory of cognitive decline. Ex vivo, neuronal-PLA2G2F mediates intercellular signaling to decrease lipid droplet burden in microglia. Boosting Pla2g2f expression in DGCs of an aging-sensitive AD model reduces amyloid load and improves memory. Our findings implicate PLA2G2F as a compensatory neuroprotective factor that maintains lipid homeostasis to counteract aging-associated cognitive decline.