Mice expressing a Cre recombinase from the lysozyme M-encoding locus (Lyz2) have been widely used to dissect gene function in macrophages and neutrophils. Here, we show that while naïve resident tissue macrophages from IL-4Rαf(lox/delta)LysM(Cre) mice almost completely lose IL-4Rα function, a large fraction of macrophages elicited by sterile inflammatory stimuli, Schistosoma mansoni eggs, or S. mansoni infection, fail to excise Il4rα. These F4/80(hi)CD11b(hi) macrophages, in contrast to resident tissue macrophages, express lower levels of Lyz2 explaining why this population resists LysM(Cre)-mediated deletion. We show that in response to IL-4 and IL-13, Lyz2(lo)IL-4Rα(+) macrophages differentiate into an arginase 1-expressing alternatively-activated macrophage (AAM) population, which slows the development of lethal fibrosis in schistosomiasis. In contrast, we identified Lyz2(hi)IL-4Rα(+) macrophages as the key subset of AAMs mediating the downmodulation of granulomatous inflammation in chronic schistosomiasis. Our observations reveal a limitation on using a LysMCre mouse model to study gene function in inflammatory settings, but we utilize this limitation as a means to demonstrate that distinct populations of alternatively activated macrophages control inflammation and fibrosis in chronic schistosomiasis.