The inability to reliably replicate mitochondrial DNA (mtDNA) by mitochondrial DNA polymerase gamma (POLG) leads to a subset of common mitochondrial diseases associated with neuronal death and depletion of neuronal mtDNA. Defining disease mechanisms remains difficult due to the limited access to human tissue. Astrocytes are highly abundant in the brain, playing a crucial role in the support and modulation of neuronal function. Astrocytes also respond to insults affecting the brain. Following damage to the center neural system, which can be hypoxia, inflammation or neurodegeneration, astrocytes become activated, lose their supportive role and gain toxic functions that induce rapid death of neurons and oligodendrocytes. The role of astrocyte reactivation and the consequences this has for neuronal homeostasis in mitochondrial diseases has not been explored. Here, using patient cells carrying POLG mutations, we generated iPSCs and then differentiated into astrocytes. We demonstrated that POLG-astrocytes exhibited both mitochondrial dysfunctions, including loss of mitochondrial membrane potential, energy failure, complex I and IV defects, disturbed NAD+/NADH metabolism, and mtDNA depletion. Further, POLG derived astrocytes presented an A1-like reactive phenotype with increased proliferation, invasion, upregulation of pathways involved in response to stimulus, immune system process, cell proliferation and cell killing. Under direct and indirect co-culture with neurons, POLG-astrocytes exhibited a toxic effect leading to the death of neurons. Our findings demonstrate that mitochondrial dysfunction caused by POLG mutations leads not only to intrinsic defects in energy metabolism affecting both neurons and astrocytes, but also to neurotoxic damage driven by astrocytes. Our studies provide a robust astroglia-neuron interaction model for future investigation of mitochondrial involvement in neurogenesis and neurodegenerative diseases.