During pregnancy, immune cells infiltrate the placenta at different stages of fetal development. NK cells and macrophages are the most predominant cell types. These immune cells play pleiotropic roles, as they control spiral artery remodeling to ensure appropriate blood supply and maintain long-term tolerance to a true allograft; yet, they must be able to mount appropriate immune defenses to pathogens that may threaten the fetus. Whether the same cell type accomplishes all these tasks or if there are dedicated subsets remains controversial. Here, we identify and characterize two distinct subsets of myeloid cells that differ in their pro-inflammatory/regulatory capacity. While one subset predominantly produces the immune-modulating cytokine IL-10, the second subset has superior capacity to secrete pro-inflammatory mediators, such as IL-1β and IL-6. The putative regulatory myeloid cells also express high levels of inhibitory receptors and their ligands, including programmed cell death 1 (PD1) ligands. Importantly, a large fraction of CD8 and CD4 cells in normal term human placenta are PD1 positive, suggesting that the PD1/PD1 ligands axis might be critical to maintain tolerance during pregnancy.