Monocytes from the circulation that enter the kidney in response to inflammatory cues undergo distinctive pathways of differentiation into classically activated M1 macrophages or the alternative M2 phenotype. Activation of M1 inflammatory macrophages by classical immune pathways may lead to the expression of MHC class II antigens and release of proinflammatory cytokines. In response to ongoing injury, M1 macrophages propagate inflammation and ultimately the development of fibrosis. Dependent on microenvironmental cues, M2 macrophages may be recruited from the circulation or activated in situ as a result of an M1-to-M2 phenotype switch. M2 antiinflammatory macrophages secrete regenerative trophic factors that promote cell proliferation and reduce apoptosis and stimulate angiogenesis. Macrophages derived from engrafting bone marrow myeloid progenitors may contribute to the repopulation of injured tubular epithelial and glomerular cells by a process of transdifferentiation or cell-cell fusion, leading to replacement of damaged cells. Ex vivo modulation of macrophages to form an M2 phenotype for transplantation may be used therapeutically to suppress the immune response and promote tissue remodeling, leading to structural repair and functional recovery. R, receptor.