CD14+ monocytes contain precursors for macrophages and fibrocytes, known to be involved in regulating airway remodeling in human asthma and distinguishable by the PM-2K marker. We sought to identify circulating subsets of PM-2K+ macrophage-like cells and evaluate their relationships to lung function, severity and control status. Circulating PM-2K+ macrophage-like cells and fibrocytes could be identified and distinguished between normal individuals (N = 152) and asthmatic subjects (N = 133) using multi-parametric flow cytometry. PM-2K+ macrophage-like cells were found to be significantly lower in asthmatic subjects, particularly noted for the CD14-PM-2K+ subset and PM-2K+CCR7-CD86+ cells in subjects with poor lung function (FEV%/FVC% < 80%) as compared to those of normal subjects and asthmatics with normal lung function, whereas the frequency of fibrocytes was higher in asthmatics and the CCR7-CD86+ subset distribution was significantly different in subjects with varying severity. Moreover, exogenous transforming growth factor beta 1 (TGF-β1) was found to inhibit the generation of PM-2K+ macrophage-like cells, but promote the growth of fibrocytes, from CD14+ monocytes, and monocyte-derived TGF-β1 was found to correlate with the lung function, severity and control status in asthmatic patients. Collectively, aberrant differentiation of monocytes into PM-2K+ macrophage-like cell subsets and fibrocytes, together with increased monocyte-derived TGF-β1, characterized patients with severe asthma.