Problem During early pregnancy, macrophages and trophoblast come into close contact during placenta development, and regulated cross talk between these cellular compartments is crucial for maintaining a healthy pregnancy. As trophoblast cells constitutively secrete many chemokines and cytokines, we hypothesize that trophoblast secreted factors can differentiate monocytes into a decidual phenotype. In this study, we describe a unique macrophage phenotype following monocytes’ exposure to trophoblast soluble factors. Method of Study Peripheral blood monocytes were treated with or without conditioned media (CM) from first trimester trophoblast cells. Phenotypic changes and phagocytic capacity were determined by flow cytometry. Cytokine and chemokine production was determined by multiplex analysis. Results Monocytes exposed to trophoblast factors undergo morphologic changes characterized by a gain in size and complexity and acquire a unique phenotype characterized by gain of CD14 surface expression as well as CD16. The presence of CD14+/CD16+ macrophages was confirmed in normal decidua. These cells secrete higher levels of IL-1b, IL-10, and IP-10 and have increased capacity for phagocytosis. Conclusion We demonstrate that trophoblast secreted factors can induce monocyte differentiation into a unique macrophage phenotype. These findings suggest that the microenvironment of the placenta can modulate the phenotype of macrophages present at the decidua.