Abstract Monocytes are short-lived myeloid immune cells that arise from adult hematopoiesis and circulate for a short time in the blood. They comprise two main subsets, in mice defined as classical Ly6C high and non-classical Ly6C low monocytes (CM, NCM). Recent fate mapping and transcriptomic analyses revealed that CM themselves are heterogeneous. Here, we report surface markers that allow segregation of murine GMP- and MDP-derived CM in the BM and blood. Functional characterization, including fate definition following adoptive cell transfer, established that GMP-Mo and MDP-Mo could equal rise to homeostatic CM progeny, such as NCM in blood and gut macrophages, but differentially seeded selected other tissues. Specifically, GMP-Mo and MDP-Mo gave rise to distinct interstitial lung macrophages, thus linking CM dichotomy to previously reported pulmonary macrophage heterogeneity. Collectively, we provide comprehensive evidence for the existence of two functionally distinct CM subsets in the mouse, which differentially contribute to peripheral tissue macrophage populations in homeostasis and following challenge. Our findings are indicative of impact of monocyte ontogeny on in situ differentiation.