Monocytes/macrophages are heterogeneous and versatile cells that could undergo their phenotypically/functionally dynamic switch in response to the microenvironment signals. Two major macrophage subpopulations with different functions which represent extreme of a continuum in a universe of activation states, including classically activated/inflammatory (M1) and alternatively activated/regenerative (M2) macrophages, have long been recognized. Emerging evidence through genetic or pharmacologic approaches has now been made in defining the actual fate in vivo and in vitro underlying M1 or M2-like polarized activation under physiological and pathological conditions. These cells are characterized by their expression of cell surface markers, secreted cytokines and chemokines, and transcription and epigenetic pathways. Here in this review, we shed new light on the contribution of several major signaling pathways and their modulators/targets involved in directing the macrophage plasticity and polarized function, assess the mechanisms of macrophage polarization by interacting endogenous cellular mechanisms and molecules associated with reciprocal skewing of macrophage polarization between the M1 and M2 states. The identification of mechanisms underlying functional polarization of macrophages into M1 or M2 cells might provide new insights into a basis for macrophage-centered diagnostic and therapeutic strategies for multiple diseases.