The trematode Schistosoma mansoni is one of the etiological agents of schistosomiasis, a key neglected tropical disease responsible for an estimated annual loss of 70 million disability-adjusted life years. Hematophagy represents the primary nutrient acquisition pathway of this parasite, but digestion of hemoglobin also liberates toxic heme. Schistosomes detoxify heme via crystallization into hemozoin, which is subsequently regurgitated into the host's circulation. Here we demonstrate that during experimental schistosomiasis, hemozoin accumulating in the mouse liver is taken up by phagocytes at a time coincident with the development of the egg-induced T-helper 2 (Th2) granulomatous immune response. Furthermore, the uptake of hemozoin also coincides with the hepatic expression of markers of alternative macrophage activation. Alternatively activated macrophages are a key effector cell population associated with protection against schistosomiasis, making hemozoin well placed to play an important immunomodulatory role in this disease. To systematically explore this hypothesis, S. mansoni hemozoin was purified and added to in vitro bone marrow-derived macrophage cultures concurrently exposed to cytokines chosen to reflect the shifting state of macrophage activation in vivo. Macrophages undergoing interleukin-4 (IL-4)-induced alternative activation in the presence of hemozoin developed a phenotype specifically lacking in Retnla, a characteristic alternatively activated macrophage product associated with regulation of Th2 inflammatory responses. As such, in addition to its important detoxification role during hematophagy, we propose that schistosome hemozoin also provides a potent immunomodulatory function in the coevolved network of host-parasite relationships during schistosomiasis.