Inflammation triggers the recruitment and differentiation of inflammatory monocytes into microbicidal phagocytes or monocyte-derived dendritic cells (moDCs). It is unclear if environmental inflammatory cues control the polarization of monocytes toward each of these fates or if specialized monocyte progenitor subsets exist prior to inflammation. Here I show that naïve monocytes are heterogeneous and contain an NR4A1- and Flt3L-independent, CCR2-dependent, Flt3+CD11c-MHCII+PU.1high subset. This subset acts as a precursor for FcγRII/III+PD-L2+ CD209+, GM-CSF-dependent moDCs but is distal from the DC lineage as shown by fate mapping experiments using Zbtb46. By contrast, Flt3-CD11c-MHCII-PU.1low monocytes differentiate into FcγRII/III+PD-L2-CD209-iNOS+ macrophages upon microbial stimulation. Importantly, Sfpi1/Pu.1 haplo-insufficiency genetically distinguishes the precursor activities of monocytes toward moDCs or microbicidal macrophages. Indeed, Sfpi1+/- mice have reduced Flt3+CD11c- MHCII+ monocytes and GM-CSF-dependent FcγRII/III+PD-L2+CD209+ moDCs but generate iNOS+ macrophages more efficiently. Therefore, intercellular disparities of PU.1 expression within naive monocytes segregate progenitor activity for inflammatory microbicidal macrophages or moDCs.