Glial cells are the most abundant cells in the human brain and have long been considered as passive supporting cells for neurons. In contrast to the extensive studies on various neuronal functions in the nervous system, we still have limited knowledge about glial cells. Recently a number of pioneering studies have provided convincing evidence that glia play active roles in development and function of the central nervous system. This review discusses recent advances in our understanding of the molecular mechanisms underlying glial cell differentiation. We then highlight some of the novel findings about glial function, i.e. the role of glia in synaptogenesis and the intricate relationship between astrocytes and adult neural stem cells. Finally, we summarize the emerging studies that implicate abnormalities in the formation or maintenance of glia leading to severe brain diseases, such as Alexander disease, glioblastoma and multiple sclerosis, and potential therapeutic strategies to tackle these diseases.