Monocytes and macrophages play critical roles in immune responses, tissue homeostasis and disease progression. There are a number of functionally and phenotypically distinct subpopulations throughout the body. However, the mechanisms by which macrophage and monocyte heterogeneity is established remain unclear. Recent studies have suggested that most tissue-resident macrophages originate from fetal progenitors but not from hematopoietic stem cells, whereas some subpopulations are derived from adult monocytes. In addition, transcription factors specifically required for the development of each subpopulation have been identified. Interestingly, local environmental factors such as heme, retinoic acid and RANKL induce the expression and/or activation of tissue-specific transcription factors, thereby controlling transcriptional programs specific for the subpopulations. Thus, distinct differentiation pathways and local microenvironments appear to contribute to the determination of macrophage transcriptional identities. In this review, we highlight recent advances in our knowledge of the transcriptional control of macrophage and monocyte development.