[Science Translational Medicine, 2019] Macrophages tailor their function to the signals found in tissue microenvironments, taking on a wide spectrum of phenotypes. In human tissues, a detailed understanding of macrophage phenotypes is limited. Using single-cell RNA-sequencing, we define distinct macrophage subsets in the joints of patients with the autoimmune disease rheumatoid arthritis (RA), which affects ~1% of the population. The subset we refer to as HBEGF+ inflammatory macrophages is enriched in RA tissues and shaped by resident fibroblasts and the cytokine TNF. These macrophages promote fibroblast invasiveness in an EGF receptor dependent manner, indicating that inflammatory intercellular crosstalk reshapes both cell types and contributes to fibroblast-mediated joint destruction. In an ex vivo tissue assay, the HBEGF+ inflammatory macrophage is targeted by several anti-inflammatory RA medications, however, COX inhibition redirects it towards a different inflammatory phenotype that is also expected to perpetuate pathology. These data highlight advances in understanding the pathophysiology and drug mechanisms in chronic inflammatory disorders can be achieved by focusing on macrophage phenotypes in the context of complex interactions in human tissues.