Astrocytes are the most abundant cell type in the central nervous system, carrying out a wide spectrum of biological functions. During early development, neural progenitor cells in the ventricular zone first produce neurons, followed by macroglia in the form of astrocytes or oligodendrocytes. Although the lineage progression of oligodendrocytes has been well understood, the developmental staging of astrocytes has not been defined and the molecular mechanisms underlying their fate specification and differentiation remain largely unknown. The recent advent of sophisticated molecular biology technology, especially single‐cell sequencing, has enabled a deeper understanding of the patterning and molecular specification of astrocyte lineage. Based on the recent single‐cell sequencing data, we provide an up‐to‐date and mechanistic review of the early development and heterogeneity of astrocyte lineage in the developing cortex, and compile a list of stage‐specific markers for astrocyte development. In addition, emerging evidence suggests that under physiological conditions, mature astrocytes are partially specialized progenitor cells that have functionally adapted to local neuronal microenvironment. Under pathological or injury conditions, astrocytes are capable of reentering cell cycles and differentiating into other neural cell types under the influence of both intrinsic factors and environmental cues.