Alveolar macrophages are the most abundant macrophages in the healthy lung where they play key roles in homeostasis and immune surveillance against airborne pathogens. Tissue-specific differentiation and survival of alveolar macrophages rely on niche-derived factors, such as granulocyte-macrophage colony-stimulating factor (GM-CSF) and transforming growth factor–β (TGF-β). However, the nature of the downstream molecular pathways that regulate the identity and function of alveolar macrophages and their response to injury remain poorly understood. Here, we identify that the transcription factor EGR2 is an evolutionarily conserved feature of lung alveolar macrophages and show that cell-intrinsic EGR2 is indispensable for the tissue-specific identity of alveolar macrophages. Mechanistically, we show that EGR2 is driven by TGF-β and GM-CSF in a PPAR-γ–dependent manner to control alveolar macrophage differentiation. Functionally, EGR2 was dispensable for the regulation of lipids in the airways but crucial for the effective handling of the respiratory pathogen Streptococcus pneumoniae. Last, we show that EGR2 is required for repopulation of the alveolar niche after sterile, bleomycin-induced lung injury and demonstrate that EGR2-dependent, monocyte-derived alveolar macrophages are vital for effective tissue repair after injury. Collectively, we demonstrate that EGR2 is an indispensable component of the transcriptional network controlling the identity and function of alveolar macrophages in health and disease.