Astrocytes are increasingly recognized as critical contributors to multiple sclerosis pathogenesis. We have previously shown that lack of Response Gene to Complement 32 (RGC-32) alters astrocyte morphology in the spinal cord at the peak of experimental autoimmune encephalomyelitis (EAE), suggesting a role for RGC-32 in astrocyte differentiation. In this study, we analyzed the expression and distribution of astrocytes and astrocyte progenitors by immunohistochemistry in spinal cords of wild-type (WT) and RGC-32-knockout (KO) mice with EAE and of normal adult mice. Our analysis showed that during acute EAE, WT astrocytes had a reactive morphology and increased GFAP expression, whereas RGC-32 KO astrocytes had a morphology similar to that of radial glia and an increased expression of progenitor markers such as vimentin and fatty acid binding protein 7 (FABP7). In control mice, GFAP expression and astrocyte density were also significantly higher in the WT group, whereas the number of vimentin and FABP7-positive radial glia was significantly higher in the RGC-32 KO group. In vitro studies on cultured neonatal astrocytes from WT and RGC-32 KO mice showed that RGC-32 regulates a complex array of molecular networks pertaining to signal transduction, growth factor expression and secretion, and extracellular matrix (ECM) remodeling. Among the most differentially expressed factors were insulin-like growth factor 1 (IGF1), insulin-like growth factor binding proteins (IGFBPs), and connective tissue growth factor (CTGF); their expression was downregulated in RGC-32-depleted astrocytes. The nuclear translocation of STAT3, a transcription factor critical for astrogliogenesis and driving glial scar formation, was also impaired after RGC-32 silencing. Taken together, these data suggest that RGC-32 is an important regulator of astrocyte differentiation during EAE and that in the absence of RGC-32, astrocytes are unable to fully mature and become reactive astrocytes.