As monocytes differentiate into mature macrophages, subsets emerge that exhibit stimulatory, suppressive or phagocytic potential. These functionally distinct subsets can be discriminated using monoclonal antibodies RFD1 and RFD7. As examples of all these subsets have been repeatedly identified within the macrophage pool in a variety of organs the overall functional capacity of this pool will depend on the relative balance of these subpopulations. This study investigates whether this balance present in mature macrophage populations can be regulated by the local influence of T‐cell‐derived cytokines. The dose‐dependent effect of cytokines interferon‐γ (IFN‐γ), interleukins (IL) IL‐2, IL‐4 and IL‐10 on the phenotype and function of monocyte‐derived macrophages was determined. Subsets of mature cells were quantified by identifying RFD1⁺ RFD7⁻ stimulatory cells (D1⁺); RFD1⁻ RFD7⁺ phagocytes (D7⁺) and RFD1⁺ RFD7⁺ suppressive cells (D1/D7⁺). IFN‐γ and IL‐4 increased the relative proportions of D1⁺ stimulatory cells and upregulated HLA‐DR expression. IFN‐γ also increased the capacity of the mature macrophage pool to stimulate T‐cell proliferation. IL‐10 reduced the proportions of D1⁺ stimulatory cells while promoting the differentiation of D7⁺ phagocytes and D1/D7⁺ suppressive cells. IL‐10 induced changes also reduced the functional capacity of the mature populations to stimulate T cells in auto and allogenic mixed lymphocyte reactions (MLR). IL‐2 had no effect on differentiation of monocytes. Thus IL‐4 and IFN‐γ are seen to induce the development of stimulatory macrophages while IL‐10 promotes differentiation of monocytes to mature phagocytes and suppressive macrophages. It is concluded that mature macrophage phenotype is ‘plastic’ and under the control of T‐cell‐derived mediators. Furthermore, within the differentiating monocytes, phenotypic change appears to carry with it functional change, thus retaining the relationship between antigen expression and activity in the mature macrophage populations.