Macrophages are heterogeneous and their phenotype and functions are regulated by the surrounding micro-environment. Macrophages commonly exist in two distinct subsets: 1) Classically activated or M1 macrophages, which are pro-inflammatory and polarized by lipopolysaccharide (LPS) either alone or in association with Th1 cytokines such as IFN-γ, GM-CSF, and produce pro-inflammatory cytokines such as interleukin-1β (IL-1β), IL-6, IL-12, IL-23, and TNF-α; and 2) Alternatively activated or M2 macrophages, which are anti-inflammatory and immunoregulatory and polarized by Th2 cytokines such as IL-4 and IL-13 and produce anti-inflammatory cytokines such as IL-10 and TGF-β. M1 and M2 macrophages have different functions and transcriptional profiles. They have unique abilities by destroying pathogens or repair the inflammation-associated injury. It is known that M1/M2 macrophage balance polarization governs the fate of an organ in inflammation or injury. When the infection or inflammation is severe enough to affect an organ, macrophages first exhibit the M1 phenotype to release TNF-α, IL-1β, IL-12, and IL-23 against the stimulus. But, if M1 phase continues, it can cause tissue damage. Therefore, M2 macrophages secrete high amounts of IL-10 and TGF-β to suppress the inflammation, contribute to tissue repair, remodeling, vasculogenesis, and retain homeostasis. In this review, we first discuss the basic biology of macrophages including origin, differentiation and activation, tissue distribution, plasticity and polarization, migration, antigen presentation capacity, cytokine and chemokine production, metabolism, and involvement of microRNAs in macrophage polarization and function. Secondly, we discuss the protective and pathogenic role of the macrophage subsets in normal and pathological pregnancy, anti-microbial defense, anti-tumor immunity, metabolic disease and obesity, asthma and allergy, atherosclerosis, fibrosis, wound healing, and autoimmunity.