The astrocyte population, around 50% of human brain cells, plays a crucial role in maintaining the overall health and functionality of the central nervous system (CNS). Astrocytes are vital in orchestrating neuronal development by releasing synaptogenic molecules and eliminating excessive synapses. They also modulate neuronal excitability and contribute to CNS homeostasis, promoting neuronal survival by clearance of neurotransmitters, transporting metabolites, and secreting trophic factors. Astrocytes are highly heterogeneous and respond to CNS injuries and diseases through a process known as reactive astrogliosis, which can contribute to both inflammation and its resolution. Recent evidence has revealed remarkable alterations in astrocyte transcriptomes in response to several diseases, identifying at least two distinct phenotypes called A1 or neurotoxic and A2 or neuroprotective astrocytes. However, due to the vast heterogeneity of these cells, it is limited to classify them into only two phenotypes. This review explores the various physiological and pathophysiological roles, potential markers, and pathways that might be activated in different astrocytic phenotypes. Furthermore, we discuss the astrocyte heterogeneity in the main neurodegenerative diseases and identify potential therapeutic strategies. Understanding the underlying mechanisms in the differentiation and imbalance of the astrocytic population will allow the identification of specific biomarkers and timely therapeutic approaches in various neurodegenerative diseases.