Skeletal muscle undergoes progressive mass loss, termed sarcopenia, and increased accumulation of fibrotic tissue during aging, which reduces the life quality of the elderly and causes significant economic burden on healthcare services of society. The importance of the immune system, especially myeloid cells, in modulating muscle growth and regeneration following injury suggests that myeloid cells may also have significant influences on sarcopenia and muscle fibrosis during aging. In this investigation, we studied the regulatory interactions between myeloid cells and skeletal muscle during aging. We found that muscle aging is associated with increased number of anti-inflammatory M2a macrophages that can increase muscle fibrosis. Expression of a muscle-specific transgene of nNOS prevented the age-related increases in M2a macrophage and reduced fibrosis in aging muscle. We then tested whether aging of myeloid cells contributes to the age-related increases in M2a macrophages and the associated increases in fibrosis. Transplantation of young bone marrow cells into old mice resulted in fewer M2a macrophages and less accumulation of collagen compared to age-matched, non-transplant mice. We also found that transplantation of young bone marrow cells into old mice prevented sarcopenia. On the other hand, muscles of young mice receiving old bone marrow cells showed decreased numbers of muscle stem cells, called satellite cells, and increased numbers of fibrogenic-converted satellite cells. In vitro, media conditioned by young, but not old, bone marrow-derived macrophages increased muscle cell proliferation. These data suggest that aging of myeloid cells promotes the shift of satellites cell from a myogenic lineage to a more fibrogenic lineage during aging, and contributes to sarcopenia and muscle fibrosis. However, both the nNOS transgene and the heterochronic bone marrow transplantation can also affect muscle aging through unknown mechanisms other than changes in myeloid cells. To specifically manipulate the myeloid cell population, we designed a mouse line with a myeloid-cell-specific mutation of transcription factor Sfpi1 which specifically reduced the number of M2 macrophages in muscle. Myeloid-cell-specific mutation of Sfpi1 prevented sarcopenia and age-related muscle fibrosis, strongly suggesting that muscle aging is at least partly attributable to myeloid cells. Previous studies in our lab and by other groups suggested that tumor necrotic factor-alpha (TNFα) is a macrophage-derived factor that may contribute significantly to muscle aging. We found that systemic TNFα knockout increased satellite cell fusion into muscle fibers in old muscle and prevented sarcopenia. Furthermore, we observed that transplantation of wild-type bone marrow cells into TNFα knockout mice induced sarcopenia and reduced muscle cell fusion, indicating that TNFα secreted by myeloid cells contributes significantly to the reduction of satellite cell myogenic capacity during aging and causes sarcopenia. Overall, our findings provide insight into mechanisms of muscle aging and the regulatory interactions between myeloid cells and skeletal muscle during aging.