Kupffer cells, the largest tissue resident macrophage population, are key for the maintenance of liver integrity and its restoration after injury and infections, as well as the local initiation and resolution of innate and adaptive immunity. These important roles of Kupffer cells were recently identified in healthy and diseased liver revealing diverse functions and phenotypes of hepatic macrophages. High-level phenotypic and genomic analysis revealed that Kupffer cells are not a homogenous population and that the hepatic microenvironment actively shapes both phenotype and function of liver macrophages. Compared to macrophages from other organs, hepatic macrophages bear unique properties that are instrumental for their diverse roles in local immunity as well as liver regeneration. The diverse and, in part, contradictory roles of hepatic macrophages in anti-tumor and inflammatory immune responses as well as regulatory and regenerative processes have been obscured by the lack of appropriate technologies to specifically target or ablate Kupffer cells or monocyte-derived hepatic macrophages. Future studies will need to dissect the exact role of the hepatic macrophages with distinct functional properties linked to their differentiation status and thereby provide insight into the functional plasticity of hepatic macrophages.