CD163 is an endocytic receptor for haptoglobin-hemoglobin complexes and is expressed solely on macrophages and monocytes. As a result of ectodomain shedding, the extracellular portion of CD163 circulates in blood as a soluble protein (sCD163) at 0.7-3.9 mg/l in healthy individuals. The function of sCD163 is unknown, but during inflammation and macrophage activation, sCD163 levels increase acutely due to metalloproteinase-mediated cleavage near the cell membrane. It is now evident that sCD163 is very useful as a biomarker of macrophage activation in various inflammatory diseases, such as macrophage activation syndrome, sepsis, and liver disease. Moreover, sCD163 is a general risk marker of comorbidity and mortality in several chronic inflammatory disease states. Recently, sCD163 has been shown to be strongly associated with later development of type 2 diabetes in both lean and obese subjects, likely due to macrophage infiltration of adipose tissue and the liver. This review summarizes the current knowledge on the regulation of sCD163 in normal and pathological states and also deals with analytical aspects of sCD163 measurements in biological samples.