Astrocytes are derived from the ventricular and subventricular zones of the neural plate, though there is controversy over their derivation from astrocyte-specific precursor cells or radial glia intermediates. Astrocytes are the most abundant cell type in the brain and contribute to brain homeostasis in several ways, including buffering of extracellular K+, regulating neurotransmitter release, forming the blood-brain barrier (BBB), releasing growth factors, and regulating the brain immune response. In addition, astrocytes have been shown to release apolipoprotein E (ApoE), which has been shown to regulate neurotransmission, growth factor release, and immune responses. Due to the diverse functions of astrocytes, they may play a role in a variety of diseases such as hepatic encephalopathy, multiple sclerosis, epilepsy, and age-related diseases including Alzheimer's disease and Parkinson's disease. This review highlights many of the diverse roles played by astrocytes in regulating brain homeostasis and discusses their potential role in a variety of disorders.