Programs defining tissue-resident macrophage identity depend on local environmental cues. For alveolar macrophages (AMs), these signals are provided by immune and nonimmune cells and include GM-CSF (CSF2). However, evidence to functionally link components of this intercellular cross talk remains scarce. We thus developed new transgenic mice to profile pulmonary GM-CSF expression, which we detected in both immune cells, including group 2 innate lymphoid cells and γδ T cells, as well as AT2s. AMs were unaffected by constitutive deletion of hematopoietic Csf2 and basophil depletion. Instead, AT2 lineage-specific constitutive and inducible Csf2 deletion revealed the nonredundant function of AT2-derived GM-CSF in instructing AM fate, establishing the postnatal AM compartment, and maintaining AMs in adult lungs. This AT2-AM relationship begins during embryogenesis, where nascent AT2s timely induce GM-CSF expression to support the proliferation and differentiation of fetal monocytes contemporaneously seeding the tissue, and persists into adulthood, when epithelial GM-CSF remains restricted to AT2s.