Mouse breast regression protein 39 (BRP-39; Chi3l1) and its human homologue YKL-40 are chitinase-like proteins that lack chitinase activity. Although YKL-40 is expressed in exaggerated quantities and correlates with disease activity in asthma and many other disorders, the biological properties of BRP-39/YKL-40 have only been rudimentarily defined. We describe the generation and characterization of BRP-39^−/− mice, YKL-40 transgenic mice, and mice that lack BRP-39 and produce YKL-40 only in their pulmonary epithelium. Studies of these mice demonstrated that BRP-39^−/− animals have markedly diminished antigen-induced Th2 responses and that epithelial YKL-40 rescues the Th2 responses in these animals. The ability of interleukin13 to induce tissue inflammation and fibrosis was also markedly diminished in the absence of BRP-39. Mechanistic investigations demonstrated that BRP-39 and YKL-40 play an essential role in antigen sensitization and immunoglobulin E induction, stimulate dendritic cell accumulation and activation, and induce alternative macrophage activation. These proteins also inhibit inflammatory cell apoptosis/cell death while inhibiting Fas expression, activating protein kinase B/AKT, and inducing Faim 3. These studies establish novel regulatory roles for BRP-39/YKL-40 in the initiation and effector phases of Th2 inflammation and remodeling and suggest that these proteins are therapeutic targets in Th2- and macrophage-mediated disorders.