Astrocytes are highly complex cells that respond to a variety of external stimulations. One of the chief functions of astrocytes is to optimize the interstitial space for synaptic transmission by tight control of water and ionic homeostasis. Several lines of work have, over the past decade, expanded the role of astrocytes and it is now clear that astrocytes are active participants in the tri-partite synapse and modulate synaptic activity in hippocampus, cortex, and hypothalamus. Thus, the emerging concept of astrocytes includes both supportive functions as well as active modulation of neuronal output. Glutamate plays a central role in astrocytic-neuronal interactions. This excitatory amino acid is cleared from the neuronal synapses by astrocytes via glutamate transporters, and is converted into glutamine, which is released and in turn taken up by neurons. Furthermore, metabotropic glutamate receptor activation on astrocytes triggers via increases in cytosolic Ca(2+) a variety of responses. For example, calcium-dependent glutamate release from the astrocytes modulates the activity of both excitatory and inhibitory synapses. In vivo studies have identified the astrocytic end-foot processes enveloping the vessel walls as the center for astrocytic Ca(2+) signaling and it is possible that Ca(2+) signaling events in the cellular component of the blood-brain barrier are instrumental in modulation of local blood flow as well as substrate transport. The hormonal regulation of water and ionic homeostasis is achieved by the opposing effects of vasopressin and atrial natriuretic peptide on astroglial water and chloride uptake. In conjuncture, the brain appears to have a distinct astrocytic perivascular system, involving several potassium channels as well as aquaporin 4, a membrane water channel, which has been localized to astrocytic endfeet and mediate water fluxes within the brain. The multitask functions of astrocytes are essential for higher brain function. One of the major challenges for future studies is to link receptor-mediated signaling events in astrocytes to their roles in metabolism, ion, and water homeostasis.