With an increasing number of patients with degenerative hepatic diseases, such as liver fibrosis, and a limited supply of donor organs, there is an unmet need for therapies that can repair or regenerate damaged liver tissue. Treatment with macrophages that are capable of phagocytosis and anti-inflammatory activities such as secretion of matrix metalloproteinases (MMPs) provide an attractive cellular therapy approach. Human induced pluripotent stem cells (iPSCs) are capable of efficiently generating a large-scale, homogenous population of human macrophages using fully defined feeder- and serum-free differentiation protocol. Human iPSC-macrophages exhibit classical surface cell markers and phagocytic activity similar to peripheral blood-derived macrophages. Moreover, gene and cytokine expression analysis reveal that these macrophages can be efficiently polarized to pro-inflammatory M1 or anti-inflammatory M2 phenotypes in presence of LPS + IFN-γ and IL-4 + IL-13, respectively. M1 macrophages express high level of CD80, TNF-α, and IL-6 while M2 macrophages show elevated expression of CD206, CCL17, and CCL22. Here, we demonstrate that treatment of liver fibrosis with both human iPSC-derived macrophage populations and especially M2 subtype significantly reduces fibrogenic gene expression and disease associated histological markers including Sirius Red, αSMA and desmin in immunodeficient Rag2^-/- γc^-/- mice model, making this approach a promising cell-based avenue to ameliorate fibrosis.