Monocytes and macrophages comprise a variety of subsets with diverse functions(1-5). It is thought that these cells play a crucial role in homeostasis of peripheral organs, key immunological processes and development of various diseases. Among these diseases, fibrosis is a life-threatening disease of unknown aetiology. Its pathogenesis is poorly understood, and there are few effective therapies. The development of fibrosis is associated with activation of monocytes and macrophages(6-8). However, the specific subtypes of monocytes and macrophages that are involved in fibrosis have not yet been identified. Here we show that Ceacam1(+)Msr1(+)Ly6C(-)F4/80(-)Mac1(+) monocytes, which we term segregated-nucleus-containing atypical monocytes (SatM), share granulocyte characteristics, are regulated by CCAAT/enhancer binding protein beta (C/EBP beta), and are critical for fibrosis. Cebpb deficiency results in a complete lack of SatM. Furthermore, the development of bleomycin-induced fibrosis, but not inflammation, was prevented in chimaeric mice with Cebpb(-/-) haematopoietic cells. Adoptive transfer of SatM into Cebpb(-/-) mice resulted in fibrosis. Notably, SatM are derived from Ly6C(-)Fc epsilon RI+ granulocyte/macrophage progenitors, and a newly identified SatM progenitor downstream of Ly6C(-)Fc epsilon RI+ granulocyte/macrophage progenitors, but not from macrophage/dendritic-cell progenitors. Our results show that SatM are critical for fibrosis and that C/EBP beta licenses differentiation of SatM from their committed progenitor.