Macrophages are important cells of the innate immune system, and their study is essential to gain greater understanding of the inflammatory nature of psoriasis. We used immunohistochemistry and double-label immunofluorescence to characterize CD163(+) macrophages in psoriasis. Dermal macrophages were increased in psoriasis compared with normal skin and were identified by CD163, RFD7, CD68, lysosomal-associated membrane protein 2 (LAMP2), stabilin-1, and macrophage receptor with collagenous structure (MARCO). CD163(+) macrophages expressed C-lectins CD206/macrophage mannose receptor and CD209/DC-SIGN, as well as costimulatory molecules CD86 and CD40. They did not express mature dendritic cell (DC) markers CD208/DC-lysosomal-associated membrane glycoprotein, CD205/DEC205, or CD83. Microarray analysis of in vitro-derived macrophages treated with IFN-γ showed that many of the genes upregulated in macrophages were found in psoriasis, including STAT1, CXCL9, Mx1, and HLA-DR. CD163(+) macrophages produced inflammatory molecules IL-23p19 and IL-12/23p40 as well as tumor necrosis factor (TNF) and inducible nitric oxide synthase (iNOS). These data show that CD163 is a superior marker of macrophages, and identifies a subpopulation of "classically activated" macrophages in psoriasis. We conclude that macrophages are likely to contribute to the pathogenic inflammation in psoriasis, a prototypical T helper 1 (Th1) and Th17 disease, by releasing key inflammatory products.