Alternatively activated macrophages, generated in a T-helper 2 environment, have demonstrated roles in wound repair and tissue remodeling in addition to being charged with immune tasks. Because the hydrolytic chemistries of the phagosomal lumen are central to many of these functions, we investigated their modification after alternative activation with IL-4 and IL-13. Most significantly, we found striking up-regulation of the proteolytic levels within the phagosome of IL-4–activated macrophages. Two synergistic mechanisms were determined to underlie this up-regulation. First, IL-4–activated macrophages displayed increased expression of cathepsin S and L, providing greater proteolytic machinery to the phagosome despite unchanged rates of lysosomal contribution. Secondly, decreased phagosomal NADPH oxidase (NOX2) activity, at least partially resulting from decreased expression of the NOX2 subunit gp91^phox, resulted in a more reductive lumenal microenvironment, which in turn, enhanced activities of local cysteine cathepsins. Decreased NOX2 activity additionally increased the phagosome's ability to reduce disulfides, further enhancing the efficiency of the macrophage to degrade proteins containing disulfide bonds. Together, these changes initiated by IL-4 act synergistically to rapidly and dramatically enhance the macrophage's ability to degrade phagocytosed protein, which, we reason, better equips this cell for its roles in wound repair and tissue remodeling.