Myeloid-derived cells such as monocytes, dendritic cells (DCs), and macrophages are at the heart of the immune effector function in an inflammatory response. But because of the lack of an efficient imaging system to trace these cells live during their migration and maturation in their native environment at sub-cellular resolution, our knowledge is limited to data available from specific time-points analyzed by flow cytometry, histology, genomics and other immunological methods. Here, we have developed a ratiometric imaging method for measuring monocyte maturation in inflamed mouse lungs in situ using real-time using 2-photon imaging and complementary methods. We visualized that while undifferentiated monocytes were predominantly found only in the vasculature, a semi-differentiated monocyte/macrophage population could enter the tissue and resembled more mature and differentiated populations by morphology and surface phenotype. As these cells entered and differentiated, they were already selectively localized near inflamed airways and their entry was associated with changes in motility and morphology. We were able to visualize these during the act of differentiation, a process that can be demonstrated in this way to be faster on a per-cell basis under inflammatory conditions. Finally, our in situ analyses demonstrated increases, in the differentiating cells, for both antigen uptake and the ability to mediate interactions with T cells. This work, while largely confirming proposed models for in situ differentiation, provides important in situ data on the coordinated site-specific recruitment and differentiation of these cells and helps elaborate the predominance of immune pathology at the airways. Our novel imaging technology to trace immunogenic cell maturation in situ will complement existing information available on in situ differentiation deduced from other immunological methods, and assist better understanding of the spatio-temporal cellular behavior during an inflammatory response.