Adipose tissue resident macrophages have important roles in the maintenance of tissue homeostasis and regulate insulin sensitivity for example by secreting pro-inflammatory or anti-inflammatory cytokines. Here, we show that M2-like macrophages in adipose tissue regulate systemic glucose homeostasis by inhibiting adipocyte progenitor proliferation via the CD206/TGFβ signaling pathway. We show that adipose tissue CD206+ cells are primarily M2-like macrophages, and ablation of CD206+ M2-like macrophages improves systemic insulin sensitivity, which was associated with an increased number of smaller adipocytes. Mice genetically engineered to have reduced numbers of CD206+ M2-like macrophages show a down-regulation of TGFβ signaling in adipose tissue, together with up-regulated proliferation and differentiation of adipocyte progenitors. Our findings indicate that CD206+ M2-like macrophages in adipose tissues create a microenvironment that inhibits growth and differentiation of adipocyte progenitors and, thereby, control adiposity and systemic insulin sensitivity.Adipose tissue contains macrophages that can influence both local and systemic metabolism via the secretion of cytokines. Here, Nawaz et al. report that M2-like macrophages, present in adipose tissue, create a microenvironment that inhibits proliferation of adipocyte progenitors due to the secretion of TGF-β1.