Lechner et al. identify regenerative myeloid subpopulations, including recruited CCR2+ monocytes and Arginase1+ macrophages, during pneumonectomy-induced lung regeneration. Loss of recruited monocytes or Il4ra signaling impaired lung regeneration. The authors provide evidence that ILC2s and lung macrophages modulate the regenerative microenvironment to support alveolar epithelial stem cell proliferation and differentiation.