Abstract Alveolar macrophages are the most abundant macrophages in the healthy lung where they play key roles in homeostasis and immune surveillance against air-borne pathogens. Tissue-specific differentiation and survival of alveolar macrophages relies on niche-derived factors, such as colony stimulating factor 2 (CSF-2) and transforming growth factor beta (TGF-β). However, the nature of the downstream molecular pathways that regulate the identity and function of alveolar macrophages and their response to injury remains poorly understood. Here, we identify that the transcriptional factor EGR2 is an evolutionarily conserved feature of lung alveolar macrophages and show that cell-intrinsic EGR2 is indispensable for the tissue-specific identity of alveolar macrophages. Mechanistically, we show that EGR2 is driven by TGF-β and CSF-2 in a PPAR-γ-dependent manner to control alveolar macrophage differentiation. Functionally, EGR2 was dispensable for lipid handling, but crucial for the effective elimination of the respiratory pathogen Streptococcus pneumoniae . Finally, we show that EGR2 is required for repopulation of the alveolar niche following sterile, bleomycin-induced lung injury and demonstrate that EGR2-dependent, monocyte-derived alveolar macrophages are vital for effective tissue repair following injury. Collectively, we demonstrate that EGR2 is an indispensable component of the transcriptional network controlling the identity and function of alveolar macrophages in health and disease. One Sentence Summary EGR2 controls alveolar macrophage function in health and disease