Involved in clearance and endocytosis of hemoglobin/haptoglobin complexes by macrophages and may thereby protect tissues from free hemoglobin-mediated oxidative damage. May play a role in the uptake and recycling of iron, via endocytosis of hemoglobin/haptoglobin and subsequent breakdown of heme. Binds hemoglobin/haptoglobin complexes in a calcium-dependent and pH-dependent manner. Induces a cascade of intracellular signals that involves tyrosine kinase-dependent calcium mobilization, inositol triphosphate production and secretion of IL6 and CSF1 (By similarity). May play a role in the process of infection of porcine monocytes/macrophages by African swine fever virus (ASFV). In case of porcine reproductive and respiratory syndrome virus (PRRSV), serves mediates virion attachment and plays a role in viral entry. After shedding, the soluble form (sCD163) may play an anti-inflammatory role. Interacts with CSNK2B. Expressed in monocytes and macrophages. Detected only in one population of monocytes (CD163+) which is in advanced maturation stage. Suppressed when monocytes are differentiated towards dendritic cells by CSF1 and IL4. The SRCR domain 3 mediates calcium-sensitive interaction with hemoglobin/haptoglobin complexes. A soluble form (sCD163) is produced by proteolytic shedding which can be induced by lipopolysaccharide, phorbol ester and Fc region of immunoglobulin gamma. This cleavage is dependent on protein kinase C and tyrosine kinases and can be blocked by protease inhibitors. The shedding is inhibited by the tissue inhibitor of metalloproteinase TIMP3, and thus probably induced by membrane-bound metalloproteinases ADAMs (By similarity). Phosphorylated. It is uncertain whether Met-1 or Met-6 is the initiator.