Regionally and functionally diverse types of astrocytes exist throughout the central nervous system and participate in nearly every aspect of normal and abnormal neural function. Therefore, human astrocyte subtypes are useful tools for understanding brain function, modulating disease processes and promoting neural regeneration. Here we describe a protocol for directed differentiation and maintenance of functional astroglia from human pluripotent stem cells in a chemically defined system. Human stem cells are first differentiated into neuroepithelial cells with or without exogenous patterning molecules (days 0-21). Regular dissociation of the neuroepithelial clusters in suspension, and in the presence of mitogens, permits generation of astroglial subtypes over a long-term expansion (days 21-90). Finally, the astroglial progenitors are either amplified for an extended time or differentiated into functional astrocytes on removal of mitogens and the addition of ciliary neurotrophic factor (days >90). This method generates robust populations of functionally diversified astrocytes with high efficiency.