Kupffer cells (KC), the resident macrophages of the liver, represent the largest population of mononuclear phagocytes in the body. Phenotypic, developmental, and functional aspects of these cells in steady state and in different diseases are the focus of this review. Recently it has become evident that KC precursors seed the liver already early in fetal development, and the population can be maintained independently from circulating monocytes. However, inflammatory conditions allow rapid differentiation of monocytes into mature cells that are indistinguishable from genuine KC. KC are located in the lumen of sinusoids that receive blood both from the portal vein, carrying nutrients and microbial products from the gut, and from the hepatic artery. This positions KC ideally for their prime function, namely surveillance and clearance of the circulation. As such, they are important in iron recycling by phagocytosing effete erythrocytes, for instance. The immunophenotype of KC, characterized by a wide variety of endocytic receptors, is indicative of this scavenger function. In maintaining homeostasis, KC have an ambivalent response to exogenous triggers. On the one hand, their surveillance function requires alert responses to potentially hazardous substances. On the other hand, continuous exposure of the cells to the trigger-rich content of blood originating from the gut dampens their responsiveness to further stimuli. This ambivalence is also reflected in their diverse roles in disease pathogenesis. For the latter, we sketch the contribution of KC by giving examples of their role in metabolic disease, infections, and liver injury.