Monocytes are precursors of macrophages. Here we demonstrate that macrophage colony-stimulating factor (M-CSF)-dependent differentiation of primary human monocytes from healthy volunteers induces transcription of SREBP-1c target genes required for fatty acid (FA) biosynthesis and impairs transcription of SREBP-2 target genes required for cholesterol synthesis. Detailed lipid metabolic profiling showed that this transcriptional regulation leads to a dramatically increased fatty acid synthesis as driving force for enhanced phospholipid synthesis. During cell differentiation the major lipid class switches from cholesterol in monocytes to phosphatidylcholine in macrophages. Ultrastructural analysis revealed that this transcriptional and metabolic regulation is essential for development of macrophage filopodia and cellular organelles including primary lysosomes, endoplasmic reticulum, and Golgi network. Additional functional studies showed that suppression of fatty acid synthesis prevents phagocytosis representing a central macrophage function. Therefore induction of fatty acid synthesis is a key requirement for phagocyte development and function.