The role of Peroxisome Proliferator-Activated Receptor-γ (PPARγ) in alveolar macrophages(AMs) polarization homeostasis is closely associated with airway remodeling in COPD, but the definite mechanism remains unclear. In this study, elevated percentage of M1-type AMs and the expression of functionally cytokines were found in COPD patients and mice, which closely related to the disease severity. PPARγ was markedly up-regulated in M2-type AMs and down-regulated in M1-type AMs, and was associated with disease severity in COPD. Co-cultured with M1- or M2-type AMs promoted the epithelial-mesenchymal transition (EMT) of airway epithelial cells and the proliferation of airway smooth muscle cells. Moreover, airway remodeling and functional damage were observed in both IL4R−/− COPD mice with runaway M1-type AMs polarization and TLR4−/− COPD mice with runaway M2-type AMs polarization. Cigarette extract (CS) or lipopolysaccharide (LPS) stimulated PPARγ−/− AMs showed more serious polarization disorder towards M1, as well as CS induced PPARγ−/− COPD mice, which led to more severe airway inflammation, lung function damage, and airway remodeling. Treatment with PPARγ agonist significantly improved the polarization disorder and function activity in CS/LPS stimulated-AMs by inhibiting the JAK-STAT, MAPK and NF-κB pathways, and alleviated the airway inflammation, restored the lung function and suppressed airway remodeling in CS induced-COPD mice. Our research demonstrates that polarization homeostasis of AMs mediated by PPARγ has the protective effect in airway remodeling, and may be a novel therapeutic target for the intervention and treatment of airway remodeling in COPD.