Perineural invasion (PNI) is an ominous event strongly linked to poor clinical outcome. Cells residing within peripheral nerves collaborate with cancer cells to enable PNI, but the contributing conditions within the tumor microenvironment are not well understood. Here, we show that CCR2-expressing inflammatory monocytes (IM) are preferentially recruited to sites of PNI, where they differentiate into macrophages and potentiate nerve invasion through a cathepsin B-mediated process. A series of adoptive transfer experiments with genetically engineered donors and recipients demonstrated that IM recruitment to nerves was driven by CCL2 released from Schwann cells at the site of PNI, but not CCL7, an alternate ligand for CCR2. Interruption of either CCL2-CCR2 signaling or cathepsin B function significantly impaired PNI in vivo Correlative studies in human specimens demonstrated that cathepsin B-producing macrophages were enriched in invaded nerves, which was associated with increased local tumor recurrence. These findings deepen our understanding of PNI pathogenesis and illuminate how PNI is driven in part by corruption of a nerve repair program. Further, they support the exploration of inhibiting IM recruitment and function as a targeted therapy for PNI. Cancer Res; 77(22); 6400-14. ©2017 AACR.