Alveolar macrophages are the most abundant innate immune cells in the distal lung parenchyma, located on the luminal surface of the alveolar space. They are the first to encounter incoming pathogens and pollutants and to help orchestrate the initiation and resolution of the immune response in the lung. Similar to other tissue-resident macrophages, alveolar macrophages also perform non-immune, tissue-specific, homeostatic functions, most notably clearance of surfactant. In this review we will discuss how ontogeny and local lung environment shape the role of alveolar macrophages in health and disease.