As key cells of the immune system, macrophages coordinate the activation and regulation of the immune response. Macrophages present a complex phenotype that can vary from homeostatic, proinflammatory, and profibrotic to anti-inflammatory phenotypes. The factors that drive the differentiation from monocyte to macrophage largely define the resultant phenotype, as has been shown by the differences found in M-CSF- and GM-CSF-derived macrophages. We explored alternative inflammatory mediators that could be used for in vitro differentiation of human monocytes into macrophages. IFN-g is a potent inflammatory mediator produced by lymphocytes in disease and infections. We used IFN-g to differentiate human monocytes into macrophages and characterized the cells at a functional and proteomic level. IFN-g alone was sufficient to generate macrophages (IFN-g Mf) that were phagocytic and responsive to polarization. We demonstrate that IFN-g Mf are potent activators of T lymphocytes that produce IL-17 and IFN-g. We identified potential markers (GBP-1, IP-10, IL-12p70, and IL-23) of IFN-g Mf and demonstrate that these markers are enriched in the skin of patients with inflamed psoriasis. Collectively, we show that IFN-g can drive human monocyte to macrophage differentiation, leading to bona fide macrophages with inflammatory characteristics.