Tartrate-resistant acid phosphatase (TRAP, gene Acp5) is highly expressed in alveolar macrophages with proposed roles in lung inflammation and lung fibrosis. We previously showed that its expression and activity are higher in lung macrophages of smokers and COPD patients, suggesting involvement in smoke-induced lung damage. In this study, we explored the function of TRAP and regulation of its different mRNA transcripts (Acp5 201-206) in lung tissue exposed to cigarette smoke to elucidate its function in lung tissue. In mice exposed to cigarette smoke or air for 4-6 weeks, higher TRAP mRNA (Acp5) expression in lung tissue after smoking was mainly driven by transcript Acp5-202, which originates from macrophages. Expression of Acp5-202 correlated with transcription factors previously found to drive proliferation of macrophages. We found that ACP5-deficient alveolar macrophages and macrophages treated with a TRAP inhibitor proliferated less than control macrophages. Mechanistically this lack of proliferation after TRAP inhibition was associated with increased presence of phosphorylated ?-catenin compared to nontreated controls. Phosphorylation of ?-catenin is known to mark it for ubiquitination and degradation by the proteasome, preventing its activity in promoting cell proliferation. In conclusion, TRAP stimulates alveolar macrophage proliferation via dephosphorylation of ?-catenin. The smoke-induced increase of TRAP expression in macrophages may be a compensatory mechanism for increased cell loss due to uptake of toxic smoke particles by alveolar macrophages. By promoting proliferation, TRAP may help sustain the macrophage population after smoke exposure.