Sterile inflammation is a hallmark of tissue injury as immune cells accumulate in large numbers to clear the tissue of debris and induce blood vessel formation. The newly formed vasculature then need to mature to re-establish functional blood perfusion crucial for tissue restoration. This process involves recruitment of mural cells (pericytes and smooth muscle cells) to perivascular locations. In injured human and mouse tissues, macrophages also accumulate perivascularly. Here, we investigate if perivascular macrophages adopt a mural cell identity during tissue restoration using heritable labelling and functional studies in two mouse models of ischemia. By combining genetic fate mapping of macrophages with single-cell RNA-sequencing, we demonstrate that ischemia-recruited perivascular macrophages initiate an identity switch by downregulating expression of myeloid cell markers while upregulating various mural cell markers during 3 weeks following ischemia induction. Macrophage-depletion following angiogenesis at the site of ischemia did not impact vessel densities but led to severe mural cell deficiency and impaired maturation of the newly formed vessels. Consequently, increased vessel permeability and decreased number of perfused vessels were observed, resulting in reduced tissue perfusion. These observations were recapitulated by PDGFRβ-inhibition, which inhibited the perivascular macrophage phenotype, or induction of macrophage-specific PDGFRβ-deficiency, resulting in reduced function of the ischemic limb, in parallel with increased vessel volume and leakiness. In conclusion, this study demonstrates that macrophages in adult tissue can induce a differentiation program to morphologically, spatially, and functionally resemble mural cells while losing their macrophage identity. This macrophage identity shift was initiated by tissue injury and was demonstrated to be crucial for tissue restoration, which warrants exploration for future immunotherapies to enhance healing following ischemic injury.