Macrophages are highly plastic, and functionally diverse cells that play key roles during the processes of tissue repair. While required for proper muscle regeneration following acute injury, the enduring presence of macrophages in chronic muscle injury represents a hallmark of dystrophic muscle that likely plays a key role in driving fibrofatty replacement. In order to better understand the interactions of macrophages that drive this pathogenic process, we developed an in vitro model of macrophage polarization. M0 macrophages were stimulated towards either classically “pro-inflammatory” M1 macrophages or “anti-inflammatory” M2 macrophages, which can be further divided into subsets of M2a, M2b, M2c, and M2d macrophages. These discrete polarization states were validated based on the expression of specific markers for these various macrophage subtypes using gene and protein expression. Co-culture models were also developed to functionally evaluate the role of these discrete M2 macrophage subtypes in driving pathogenic differentiation of fibro-adipogenic progenitor (FAPs) cells. The development of these co-culture models and functional identification of these discrete macrophage subtypes allows us to elucidate how the interaction between macrophages and FAPs drive fibrofatty muscle replacement. This will facilitate our target identification efforts to find potential treatments that may prevent pathogenic macrophage persistence and differentiation, and thereby re-balance muscle repair and replacement in people living with devastating muscle diseases.