CD163 is a scavenger receptor for the endocytosis of hemoglobin and hemoglobin/haptoglobin complexes and is nearly exclusively expressed on monocytes and macrophages. CD163 is induced by IL-10 and glucocorticoids while proinflammatory cytokines like TNF reduce its expression. The cytokine IL-6 which exerts pro- and anti-inflammatory effects depending on the signaling pathway activated strongly upregulates CD163. Anti-inflammatory cells involved in the down-modulation of inflammation express high CD163 which controls immune response. Ligands of the toll-like receptors 2, 4 and 5 stimulate ectodomain shedding of CD163 thereby releasing soluble CD163 (sCD163) which mediates cellular uptake of free hemoglobin. Soluble CD163 circulates in blood and is increased in serum of critically ill patients, in chronic inflammatory and infectious diseases. Serum concentrations of sCD163 are related to disease severity and are suitable biomarkers for diagnosis, prognosis and therapeutic drug monitoring in several inflammatory disorders. Raised sCD163 even predicts comorbidity and mortality in some diseases. Relationship of CD163/sCD163 and disease severity demonstrates a fundamental role of monocytes/macrophages in various diseases. CD163 is a target to specifically deliver drugs to macrophages intending advanced therapeutic efficiency and minimization of adverse reactions. In this review article factors regulating CD163 expression and shedding, current knowledge on the function of CD163 and sCD163, and inflammatory diseases where CD163 and/or sCD163 are mostly increased are summarized.