Alveolar-like macrophages and a method for generating alveolar-like macrophages from hemangioblasts is provided. The method comprises the steps of: i) culturing the hemangioblasts in a hematopoietic-inducing medium comprising vascular endothelial growth factor (VEGF), stem cell factor (SCF) and interleukin-3 (IL-3) for a sufficient period of time to generate macrophages, and ii) culturing the macrophages in an alveolar macrophage-inducing medium comprising granulocyte macrophage colony stimulating factor (GM-CSF), and optionally macrophage colony stimulating factor (M-CSF), under suitable conditions and for a sufficient period of time to yield alveolar-like macrophages.
