Demyelinating diseases such as multiple sclerosis (MS) cause myelin degradation and oligodendrocyte death, resulting in the release of toxic iron and iron‐induced oxidative stress. Astrocytes have a large capacity for iron transport and storage, however the role of astrocytic iron homeostasis in demyelinating disorders is not completely understood. Here we investigate whether astrocytic iron metabolism modulates neuroinflammation, oligodendrocyte survival, and oxidative stress following demyelination. To this aim, we conditionally knock out ferritin in astrocytes and induce experimental autoimmune encephalomyelitis (EAE), an autoimmune‐mediated model of demyelination. Ferritin ablation in astrocytes reduced the severity of disease in both the acute and chronic phases. The day of onset, peak disease severity, and cumulative clinical score were all significantly reduced in ferritin KO animals. This corresponded to better performance on the rotarod and increased mobility in ferritin KO mice. Furthermore, the spinal cord of ferritin KO mice display decreased numbers of reactive astrocytes, activated microglia, and infiltrating lymphocytes. Correspondingly, the size of demyelinated lesions, iron accumulation, and oxidative stress were attenuated in the CNS of ferritin KO subjects, particularly in white matter regions of the spinal cord. Thus, deleting ferritin in astrocytes reduced neuroinflammation, oxidative stress, and myelin deterioration in EAE animals. Collectively, these findings suggest that iron storage in astrocytes is a potential therapeutic target to lessen CNS inflammation and myelin loss in autoimmune demyelinating diseases.