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Macrophage plasticity is critical for normal tissue repair to ensure transition from the inflammatory to the proliferative phase of healing. We examined macrophages isolated from wounds of patients afflicted with diabetes and of healthy controls and found differential expression of the methyltransferase Setdb2. Myeloid-specific deletion of Setdb2 impaired the transition of macrophages from an inflammatory phenotype to a reparative one in normal wound healing. Mechanistically, Setdb2 trimethylated histone 3 at NF-κB binding sites on inflammatory cytokine gene promoters to suppress transcription. Setdb2 expression in wound macrophages was regulated by interferon (IFN) β, and under diabetic conditions, this IFNβ-Setdb2 axis was impaired, leading to a persistent inflammatory macrophage phenotype in diabetic wounds. Setdb2 regulated the expression of xanthine oxidase and thereby the uric acid (UA) pathway of purine catabolism in macrophages, and pharmacologic targeting of Setdb2 or the UA pathway improved healing. Thus, Setdb2 regulates macrophage plasticity during normal and pathologic wound repair and is a target for therapeutic manipulation. • Setdb2 regulates macrophage plasticity during normal and pathologic wound repair • Setdb2 expression in wound macrophages depends on IFN-I/JAK/STAT1 signaling • This pathway is altered in chronic diabetic wounds because of failed surge of IFN-I • Elevated uric acid in diabetic wounds is driven by Setdb2 regulation of Xdh Kimball and Davis et al. reveal that IFN-I induces the expression of the methyltransferase Setdb2 in wound macrophages, which in turn regulates macrophage plasticity to promote wound repair. This axis is dysfunctional in diabetic wounds, where decreased Setdb2 expression results in increased NF-κB-mediated inflammation and production of uric acid. [ABSTRACT FROM AUTHOR]