Chronic inflammation in older individuals is thought to contribute to inflammatory, age-related diseases. Human monocytes are comprised of three subsets (classical, intermediate and nonclassical subsets), and despite being critical regulators of inflammation, the effect of age on the functionality of monocyte subsets remains to be fully defined. In a cross-sectional study involving 91 healthy male (aged 20–84 years, median 52.4) and 55 female (aged 20–82 years, median 48.3) individuals, we found age was associated with an increased proportion of intermediate and nonclassical monocytes (P = 0.002 and 0.04, respectively) and altered phenotype of specific monocyte subsets (e.g. increased expression of CD11b and decreased expression of CD38, CD62L and CD115). Plasma levels of the innate immune activation markers CXCL10, neopterin (P < 0.001 for both) and sCD163 (P = 0.003) were significantly increased with age. Whilst similar age-related changes were observed in both sexes, monocytes from women were phenotypically different to men [e.g. lower proportion of nonclassical monocytes (P = 0.002) and higher CD115 and CD62L but lower CD38 expression] and women exhibited higher levels of CXCL10 (P = 0.012) and sCD163 (P < 0.001) but lower sCD14 levels (P < 0.001). Monocytes from older individuals exhibit impaired phagocytosis (P < 0.05) but contain shortened telomeres (P < 0.001) and significantly higher intracellular levels of TNF both at baseline and following TLR4 stimulation (P < 0.05 for both), suggesting a dysregulation of monocyte function in the aged. These data show that aging is associated with chronic innate immune activation and significant changes in monocyte function, which may have implications for the development of age-related diseases.