Cardiac regeneration, that is, restoration of the original structure and function in a damaged heart, differs from tissue repair, in which collagen deposition and scar formation often lead to functional impairment. In both scenarios, the early-onset inflammatory response is essential to clear damaged cardiac cells and initiate organ repair, but the quality and extent of the immune response vary. Immune cells embedded in the damaged heart tissue sense and modulate inflammation through a dynamic interplay with stromal cells in the cardiac interstitium, which either leads to recapitulation of cardiac morphology by rebuilding functional scaffolds to support muscle regrowth in regenerative organisms or fails to resolve the inflammatory response and produces fibrotic scar tissue in adult mammals. Current investigation into the mechanistic basis of homeostasis and restoration of cardiac function has increasingly shifted focus away from stem cell-mediated cardiac repair towards a dynamic interplay of cells composing the less-studied interstitial compartment of the heart, offering unexpected insights into the immunoregulatory functions of cardiac interstitial components and the complex network of cell interactions that must be considered for clinical intervention in heart diseases.