Monocytes are established circulating precursors for tissue macrophages and dendritic cells (DCs). Monocyte-derived macrophages and DCs fulfill critical roles in innate and adaptive immunity during inflammation, and it is believed that monocytes also maintain these populations in peripheral tissues during homeostasis. However, the continuous replenishment of any DC pool by blood monocytes in the steady state remains to be established, and some macrophage populations may be self-renewing in the steady state. Recent identification of mouse monocyte subsets that closely resemble human monocyte subsets has inspired a variety of techniques wherein monocytes can be readily traced in vivo to address these critical questions. There are two major monocyte subsets that vary in chemokine receptor (CCR) and adhesion molecule expression, and in migratory and differentiation properties. In humans, 'classical' CD14+ CD16- monocytes express CCR2, CD64, CD62L, whereas 'non-classical' CD14low CD16+ monocytes lack CCR2. Their counterparts in mice are CCR2+ Gr-1hi and CCR2- Gr-1low monocytes, respectively. Gr-1hi (Ly6Chi) monocytes are recruited to inflammatory sites, e.g. inflamed skin or acutely inflamed peritoneum and give rise to macrophages and DCs in inflammatory or infectious disease models and to epidermal Langerhans cells after skin inflammation. Gr-1low monocytes have been proposed as precursors for steady state DCs, but experimental evidence is as of yet limited. Fortunately, the rate of progress in the study of monocyte fate is rapidly picking up pace, giving rise to the expectation that we will soon know much more about the biology of monocytes in the steady state and inflammation.