Astrocytes, traditionally viewed as supportive cells within the central nervous system (CNS), are now recognized as dynamic regulators of neural signaling and homeostasis. They actively engage in synaptic transmission and brain health by releasing gliotransmitters such as glutamate, GABA, ATP, adenosine, lactate, and d-serine. Astrocytes also play a critical role in ion homeostasis and immune response through cytokine modulation and reactive oxygen species regulation. In pathological states, astrocytes can become reactive, contributing to neurodegeneration through dysregulated gliotransmitter release and metabolic dysfunction. Recently developed molecular and pharmacological tools allow the exploration of astrocytic response to injury and its influence on neuronal function. This review explores the multifaceted roles of astrocytes in health and disease, emphasizing sensory and motor functions as well as various neurological and psychiatric disorders. Understanding astrocyte-neuron signaling in health and disease provides crucial insights into their dual roles, offering novel avenues for therapeutic interventions in CNS disorders.