Macrophages dominate sites of CNS injury in which they promote both injury and repair. These divergent effects may be caused by distinct macrophage subsets, i.e., “classically activated” proinflammatory (M1) or “alternatively activated” anti-inflammatory (M2) cells. Here, we show that an M1 macrophage response is rapidly induced and then maintained at sites of traumatic spinal cord injury and that this response overwhelms a comparatively smaller and transient M2 macrophage response. The high M1/M2 macrophage ratio has significant implications for CNS repair. Indeed, we present novel data showing that only M1 macrophages are neurotoxic and M2 macrophages promote a regenerative growth response in adult sensory axons, even in the context of inhibitory substrates that dominate sites of CNS injury (e.g., proteoglycans and myelin). Together, these data suggest that polarizing the differentiation of resident microglia and infiltrating blood monocytes toward an M2 or “alternatively” activated macrophage phenotype could promote CNS repair while limiting secondary inflammatory-mediated injury.