Alternative (M2) activation of macrophages driven via the α-chain of the receptor for interleukin 4 (IL-4Rα) is important for immunity to parasites, wound healing, the prevention of atherosclerosis and metabolic homeostasis. M2 polarization is dependent on fatty acid oxidation (FAO), but the source of the fatty acids that support this metabolic program has not been clear. We found that the uptake of triacylglycerol substrates via the scavenger receptor CD36 and their subsequent lipolysis by lysosomal acid lipase (LAL) was important for the engagement of elevated oxidative phosphorylation, enhanced spare respiratory capacity (SRC), prolonged survival and expression of genes that together define M2 activation. Inhibition of lipolysis suppressed M2 activation during infection with a parasitic helminth and blocked protective responses to this pathogen. Our findings delineate a critical role for cell-intrinsic lysosomal lipolysis in M2 activation.