Astrocytes are specialized glial cells that outnumber neurons by over fivefold. They contiguously tile the entire central nervous system (CNS) and exert many essential complex functions in the healthy CNS. Astrocytes respond to all forms of CNS insults through a process referred to as reactive astrogliosis, which has become a pathological hallmark of CNS structural lesions. Substantial progress has been made recently in determining functions and mechanisms of reactive astrogliosis and in identifying roles of astrocytes in CNS disorders and pathologies. A vast molecular arsenal at the disposal of reactive astrocytes is being defined. Transgenic mouse models are dissecting specific aspects of reactive astrocytosis and glial scar formation in vivo. Astrocyte involvement in specific clinicopathological entities is being defined. It is now clear that reactive astrogliosis is not a simple all-or-none phenomenon but is a finely gradated continuum of changes that occur in context-dependent manners regulated by specific signaling events. These changes range from reversible alterations in gene expression and cell hypertrophy with preservation of cellular domains and tissue structure, to long-lasting scar formation with rearrangement of tissue structure. Increasing evidence points towards the potential of reactive astrogliosis to play either primary or contributing roles in CNS disorders via loss of normal astrocyte functions or gain of abnormal effects. This article reviews (1) astrocyte functions in healthy CNS, (2) mechanisms and functions of reactive astrogliosis and glial scar formation, and (3) ways in which reactive astrocytes may cause or contribute to specific CNS disorders and lesions.