Alveolar macrophages (AMs) derived from embryonic precursors seed the lung before birth and self-maintain locally throughout adulthood, but are regenerated by bone marrow (BM) under stress conditions. However, the regulation of AM development and maintenance remains poorly understood. Here, we show that histone deacetylase 3 (HDAC3) is a key epigenetic factor required for AM embryonic development, postnatal homeostasis, maturation, and regeneration from BM. Loss of HDAC3 in early embryonic development affects AM development starting at E14.5, while loss of HDAC3 after birth affects AM homeostasis and maturation. Single-cell RNA sequencing analyses reveal four distinct AM sub-clusters and a dysregulated cluster-specific pathway in the HDAC3-deficient AMs. Moreover, HDAC3-deficient AMs exhibit severe mitochondrial oxidative dysfunction and deteriorative cell death. Mechanistically, HDAC3 directly binds to Pparg enhancers, and HDAC3 deficiency impairs Pparg expression and its signaling pathway. Our findings identify HDAC3 as a key epigenetic regulator of lung AM development and homeostasis.