Type 2 immunity against pathogens is tightly regulated to ensure appropriate inflammatory responses that clear infection and prevent excessive tissue damage. Recent research has shown that type 2 innate lymphoid cells (ILC2s) contribute to steady-state tissue integrity and exert tissue-specific functions. However, upon exposure to inflammatory stimuli, they also initiate and amplify type 2 inflammation by inducing mucus production, eosinophilia, and Th2 differentiation. In this review, we discuss the regulation of ILC2 activation by transcription factors and metabolic pathways, as well as by extrinsic signals such as cytokines, lipid mediators, hormones, and neuropeptides. We also review recent discoveries about ILC2 plasticity and heterogeneity in different tissues, as revealed partly through single-cell RNA sequencing of transcriptional responses to various stimuli. Understanding the tissue-specific pathways that regulate ILC2 diversity and function is a critical step in the development of potential therapies for allergic diseases.