CD163 is a hemoglobin scavenger receptor exclusively expressed in the monocyte-macrophage system. A particularly high expression is seen in macrophages of the 'alternative activation' phenotype playing a major role in dampening the inflammatory response and in scavenging components of damaged cells. CD163-mediated endocytosis of haptoglobin-hemoglobin complexes formed upon red blood cell hemolysis leads to lysosomal degradation of the ligand protein and metabolism of heme by cytosolic heme oxygenase. In accordance with a stimulated expression of haptoglobin, CD163 and heme oxygenase-1 during the acute phase response, there is evidence that this metabolic pathway regulates inflammation by at least two ways. First, CD163 is reported to directly induce intracellular signaling leading to secretion of anti-inflammatory cytokines. Second and perhaps even more important, the CD163-mediated delivery of hemoglobin to the macrophage may fuel an anti-inflammatory response because heme metabolites have potent anti-inflammatory effects. In addition to being present on the macrophage surface, continuous shedding of the extracellular domain of CD163 leads to substantial amounts of soluble receptor in plasma. An increased shedding is due to inflammatory stimuli, and a role for soluble CD163 in immune suppression has been proposed. Furthermore, recent data indicate that soluble CD163 may be a valuable diagnostic parameter for monitoring macrophage activation in inflammatory conditions.