Normal tissue architecture is disrupted following injury, as resident tissue cells become damaged and immune cells are recruited to the site of injury. While injury and inflammation are critical to tissue remodeling, the inability to resolve this response can lead to the destructive complications of chronic inflammation. In the pancreas, acinar cells of the exocrine compartment respond to injury by transiently adopting characteristics of progenitor cells present during embryonic development. This process of de-differentiation creates a window where a mature and stable cell gains flexibility and is potentially permissive to changes in cellular fate. How de-differentiation can turn an acinar cell into another cell type (such as a pancreatic β-cell), or a cell with cancerous potential (as in cases of deregulated Kras activity) is of interest to both the regenerative medicine and cancer communities. While it is known that inflammation and acinar de-differentiation increase following pancreatic injury, it remains unclear which immune cells are involved in this process. We used a combination of genetically modified mice, immunological blockade and cellular characterization to identify the immune cells that impact pancreatic regeneration in an in vivo model of pancreatitis. We identified the innate inflammatory response of macrophages and neutrophils as regulators of pancreatic regeneration. Under normal conditions, mild innate inflammation prompts a transient de-differentiation of acinar cells that readily dissipates to allow normal regeneration. However, non-resolving inflammation developed when elevated pancreatic levels of neutrophils producing interferon-γ increased iNOS levels and the pro-inflammatory response of macrophages. Pancreatic injury improved following in vivo macrophage depletion, iNOS inhibition as well as suppression of iNOS levels in macrophages via interferon-γ blockade, supporting the impairment in regeneration and the development of chronic inflammation arises from aberrant activation of the innate inflammatory response. Collectively these studies identify targetable inflammatory factors that can be used to influence the development of non-resolving inflammation and pancreatic regeneration following injury.