Müller cells are active players in normal retinal function and in virtually all forms of retinal injury and disease. Reactive Müller cells protect the tissue from further damage and preserve tissue function by the release of antioxidants and neurotrophic factors, and may contribute to retinal regeneration by the generation of neural progenitor/stem cells. However, Müller cell gliosis can also contribute to neurodegeneration and impedes regenerative processes in the retinal tissue by the formation of glial scars. This article provides an overview of the neuroprotective and detrimental effects of Müller cell gliosis, with accounts on the cellular signal transduction mechanisms and factors which are implicated in Müller cell-mediated neuroprotection, immunomodulation, regulation of Müller cell proliferation, upregulation of intermediate filaments, glial scar formation, and the generation of neural progenitor/stem cells. A proper understanding of the signaling mechanisms implicated in gliotic alterations of Müller cells is essential for the development of efficient therapeutic strategies that increase the supportive/protective and decrease the destructive roles of gliosis.