Potentially, cellular iron regulates functional plasticity in macrophages yet; interaction of functionally polarized macrophages with iron-oxide nanoparticles has never been studied. We found that monocyte differentiation alters cellular ferritin and cathepsin L levels and induces functional polarization in macrophages. Iron in super paramagnetic iron-oxide nanoparticle (SPION) induces a phenotypic shift in THP1 derived M2 macrophages towards a high CD86+ and high TNF alpha+ macrophage subtype. This phenotypic shift was accompanied by up-regulated intracellular levels of ferritin and cathepsin L in M2 macrophages, which is a characteristic hallmark of M1 macrophages. Atherogenic oxysterols reduce phagocytic activity in macrophage subtypes, and thus these cells may escape detection by iron-oxide nanoparticles (INPs) in-vivo. (C) 2013 Elsevier Inc. All rights reserved.