Alveolar macrophages (AMs) constitute the first line of defence in the lung of all species, playing a crucial role in the regulation of immune responses to inhaled pathogens. A detailed understanding of the function and phenotype of AMs is a necessary pre-requisite to both elucidating their role in preventing opportunistic bacterial colonisation of the lower respiratory tract and developing appropriate preventative strategies. The purpose of the study was to characterise this important innate immune cell at the tissue level by making functional and phenotypic comparisons with peritoneal macrophages (PMs). We hypothesised that the tissue of origin determines a unique phenotype of AMs, which may constitute an appropriate therapeutic target for certain equine respiratory diseases. Macrophages isolated from the lung and the peritoneal cavity of 9 horses were stimulated with various toll like receptor (TLR) ligands and the production of nitrite, tumour necrosis factor alpha (TNFα), interleukin (IL) 10 and indoleamine 2,3-dioxygenase (IDO) were measured by the Griess reaction and enzyme linked immunosorbent assay (ELISA) and/or quantitative polymerase chain reaction, respectively. Cells were also compared on the basis of phagocytic-capacity and the expression of several cell surface markers. AMs, but not PMs, demonstrated increased TNFα release following stimulation with LPS, polyinosinic polycytidylic acid (Poly IC) and heat-killed Salmonella typhinurium and increased TNFα and IDO mRNA expression when stimulated with LPS. AMs showed high expression of the specific macrophage markers cluster of differentiation (CD) 14, CD163 and TLR4, whereas PMs showed high expression of TLR4 only. AMs, but not PMs, demonstrated efficient phagocytic activity. Our results demonstrate that AMs are more active than PMs when stimulated with various pro-inflammatory ligands, thus supporting the importance of the local microenvironment in the activation status of the macrophage. This information provides a valuable knowledge base on which to improve our understanding of the role of macrophages and their microenvironment in equine innate immunity.