The functionality of immune cells is manipulated within the ocular microenvironment to protect the sensitive and non-regenerating light-gathering tissue from the collateral damage of inflammation. This is mediated partly by the constitutive presence of immunomodulating neuropeptides. Treating primary resting macrophages with soluble factors produced by the posterior eye induced co-expression of Arginase1 and NOS2. The neuropeptides alpha-melanocyte stimulating hormone and Neuropeptide Y alternatively activated the macrophages to co-express Arginase1 and NOS2 like myeloid suppressor cells. Similar co-expressing cells were found within healthy, but not in wounded retinas. Therefore, the healthy retina regulates macrophage functionality to the benefit of ocular immune privilege.