Tissue macrophages arise during embryogenesis from yolk-sac (YS) progenitors that give rise to primitive YS macrophages. Until recently, it has been impossible to isolate or derive sufficient numbers of YS-derived macrophages for further study, but data now suggest that induced pluripotent stem cells (iPSCs) can be driven to undergo a process reminiscent of YS-hematopoiesis in vitro. We asked whether iPSC-derived primitive macrophages (iMacs) can terminally differentiate into specialized macrophages with the help of growth factors and organ-specific cues. Co-culturing human or murine iMacs with iPSC-derived neurons promoted differentiation into microglia-like cells in vitro. Furthermore, murine iMacs differentiated in vivo into microglia after injection into the brain and into functional alveolar macrophages after engraftment in the lung. Finally, iPSCs from a patient with familial Mediterranean fever differentiated into iMacs with pro-inflammatory characteristics, mimicking the disease phenotype. Altogether, iMacs constitute a source of tissue-resident macrophage precursors that can be used for biological, pathophysiological, and therapeutic studies.