Spalt-like transcription factor 1 (SALL1) is a critical regulator of organogenesis and microglia identity. Here we demonstrate that disruption of a conserved microglia-specific super-enhancer interacting with the Sall1 promoter results in complete and specific loss of Sall1 expression in microglia. By determining the genomic binding sites of SALL1 and leveraging Sall1 enhancer knockout mice, we provide evidence for functional interactions between SALL1 and SMAD4 required for microglia-specific gene expression. SMAD4 binds directly to the Sall1 super-enhancer and is required for Sall1 expression, consistent with an evolutionarily conserved requirement of the TGFβ and SMAD homologs Dpp and Mad for cell-specific expression of Spalt in the Drosophila wing. Unexpectedly, SALL1 in turn promotes binding and function of SMAD4 at microglia-specific enhancers while simultaneously suppressing binding of SMAD4 to enhancers of genes that become inappropriately activated in enhancer knockout microglia, thereby enforcing microglia-specific functions of the TGFβ–SMAD signaling axis.