Chronic infections represent a continuous battle between the host's immune system and pathogen replication. Many protozoan parasites have evolved a cyst lifecycle stage that provides it with increased protection from environmental degradation as well as endogenous host mechanisms of attack. In the case of Toxoplasma gondii, these cysts are predominantly found in the immune protected brain making clearance of the parasite more difficult and resulting in a lifelong infection. Currently, little is known about the nature of the immune response stimulated by the presence of these cysts or how they are able to propagate. Here we establish a novel chitinase-dependent mechanism of cyst control in the infected brain. Despite a dominant Th1 immune response during Toxoplasma infection there exists a population of alternatively activated macrophages (AAMØ) in the infected CNS. These cells are capable of cyst lysis via the production of AMCase as revealed by live imaging, and this chitinase is necessary for protective immunity within the CNS. These data demonstrate chitinase activity in the brain in response to a protozoan pathogen and provide a novel mechanism to facilitate cyst clearance during chronic infections.