The ability of Toxoplasma gondii to cause clinical disease in immune-competent and immune-deficient hosts coupled with its ease of use in vitro and availability of murine models has led to its use as a model organism to study how the immune system controls an intracellular infection. This article reviews the studies that established the role of the cytokine IFN-γ in the activation of macrophages to control T gondii and the events that lead to the mobilization and expansion of macrophage populations and their ability to limit parasite replication. Macrophages also have pro-inflammatory functions that promote protective NK and T-cell activities as well as regulatory properties that facilitate the resolution of inflammation. Nevertheless, while macrophages are important in determining the outcome of infection, T gondii has evolved mechanisms to subvert macrophage activation and can utilize their migratory activities to promote dissemination and these two properties underlie the ability of this parasite to persist and cause disease.