Idiopathic pulmonary fibrosis (IPF) is characterized by increased collagen accumulation that is progressive and non-resolving. Although fibrosis progression may be regulated by fibroblasts and alveolar macrophage (AM) interactions, this cellular interplay has not been fully elucidated. To study AM-fibroblast interactions, cells were isolated from IPF and normal human lung tissue and cultured independently or together in direct 2D co-culture, direct 3D co-culture, indirect transwell, and in 3D hydrogels. AM influence on fibroblast function was assessed by gene expression, cytokine/chemokine secretion, and gel/matrix contractility. Normal AMs cultured in direct contact with fibroblasts down-regulated ECM gene expression while IPF AMs showed little to no effect. Fibroblast contractility was assessed by encapsulating co-cultures in 3D collagen hydrogels and monitoring gel diameter over time. Both normal and IPF AMs reduced baseline contractility of normal fibroblasts but had little to no effect on IPF fibroblasts. When stimulated with Toll-like receptor (TLR) agonists, IPF AMs increased production of pro-inflammatory cytokines TNFα and IL-1β, compared to normal AMs. TLR ligand stimulation did not alter fibroblast contraction, but stimulation with exogenous TNFα and TGF-β did alter contraction. To determine if the observed changes required cell-to-cell contact, AM-conditioned media and transwell systems were utilized. Transwell culture showed decreased ECM gene expression changes compared to direct co-culture and conditioned media from AMs did not alter fibroblast contraction regardless of disease state. Taken together, these data indicate that normal fibroblasts are more responsive to AM crosstalk, and that AM influence on fibroblast behavior depends on cell proximity.