Abstract Colorectal cancer is a leading cause of cancer mortality and arises from genetic and epigenetic changes in colon epithelial cells. One of the mechanisms driving colon epithelial cell transformation is the bystander effect (BSE). BSE primarily arises from polarized macrophages (MØs) in stromal tissue. Herein, we report that alternatively activated (M2) MØs, as generated by interleukin (IL)-4, induce double-strand DNA breaks in target cells through BSE. Unlike M1 MØs that are activated by intestinal microbiota, BSE and DNA damage due to M2-like MØs occur through a distinct mechanism that differs from M1 MØs and does not involve pro-inflammatory mediators (e.g., cyclooxygenase-2 or tumor necrosis factor-α). Murine MØs (RAW264.7 cells) treated with IL-4 were polarized to an M2-like phenotype and found to strongly express arginase 1 (ARG1), a prototypical enzyme that converts L-arginine to L-ornithine and urea. L-Ornithine is a precursor in polyamine synthesis with H2O2 being a key oxidizing byproduct of polyamine catabolism. In a dual-chamber system using Young Adult Mouse Colon (YAMC) cells as targets for BSE generated by M2-like MØs, inhibition of ARG1 by N-hydroxy-nor-L-arginine abolished DNA damage (as measured by γH2AX). Direct treatment of YAMC cells with L-ornithine resulted in similar levels of DNA damage as M2-like MØs. YAMC cells exposed to M2-like MØs had increased intracellular H2O2. MDL-72527, an inhibitor polyamine oxidase and polyamine catabolism, reduced intracellular H2O2 to background levels and decreased DNA damage. YAMC cells sustaining DNA damage due to BSE from M2-like MØs showed specific phosphorylation of p53(ser15) and NF-κB(ser536) with no evidence for active caspase-3. These data along with an increased expression of cyclinD1 in YAMC cells indicated that DNA damage caused by M2-like MØs occurred via polyamine catabolism and was not due to cellular toxicity or apoptosis. Pathway analysis of RNAseq data for YAMC cells exposed to M2-like MØs identified multiple activated pathways including DNA repair, ubiquitination, Nrf2-mediated stress responses, endoplasmic reticulum overload responses, and lipid biosynthesis. These results provide additional evidence for global cellular responses to BSE generated by M2-like MØs. In conclusion, our findings show that M2-like MØs can generate BSE via a novel mechanism involving ARG1. Induction of BSE by M2-like MØs results in acute DNA damage in colon epithelial cells and activates multiple signaling pathways in target epithelial cells. These data imply a role for alternatively activated M2-like MØs in the malignant transformation of epithelial cells. Citation Format: Ram B. Undi, Hunter L. Porter, Jonathan D. Wren, Naushad Ali, Mark M. Huycke. Alternatively activated macrophages induce bystander effects via arginase 1 [abstract]. In: Proceedings of the American Association for Cancer Research Annual Meeting 2023; Part 1 (Regular and Invited Abstracts); 2023 Apr 14-19; Orlando, FL. Philadelphia (PA): AACR; Cancer Res 2023;83(7_Suppl):Abstract nr 306.