The role of macrophages in controlling tissue inflammation is indispensable to ensure a context-appropriate response to pathogens whilst preventing excessive tissue damage. Their initial response is largely characterized by high production of tumor necrosis factor alpha (TNFα) which primes and attracts other immune cells, thereafter, followed by production of interleukin 10 (IL-10) which inhibits cell activation and steers towards resolving of inflammation. This delicate balance is understood at a population level but how it is initiated at a single-cell level remains elusive. Here, we utilize our previously developed droplet approach to probe single-cell macrophage activation in response to toll-like receptor 4 (TLR4) stimulation, and how single-cell heterogeneity and cellular communication affect macrophage-mediated inflammatory homeostasis. We show that only a fraction of macrophages can produce IL-10 in addition to TNFα upon LPS-induced activation, and that these cells are not phenotypically different from IL-10 non-producers nor exhibit a distinct transcriptional pathway. Finally, we demonstrate that the dynamics of TNFα and IL-10 are heavily controlled by macrophage density as evidenced by 3D hydrogel cultures suggesting a potential role for quorum sensing. These exploratory results emphasize the relevance of understanding the complex communication between macrophages and other immune cells and how these amount to population-wide responses.