The prevailing view of the astrocytic response to injury is that reactive astrocytes impede the regenerative process by forming scar tissue. As the levels of many cytokines dramatically increase following CNS insult and as this increase in cytokine expression precedes the production of the glial scar, a long-standing view has been that cytokines diminish neuronal survival and regeneration by stimulating the formation of astrogliotic scar tissue. However, there is a wealth of data indicating that cytokines ‘activate’ astrocytes, and that cytokine-stimulated astrocytes can promote the recovery of CNS function. Supporting evidence demonstrates that cytokine-activated astrocytes produce energy substrates and trophic factors for neurons and oligodendrocytes, act as free radical and excess glutamate scavengers, actively restore the blood–brain barrier, promote neovascularization, restore CNS ionic homeostasis, promote remyelination and also stimulate neurogenesis from neural stem cells. Accordingly, a re-assessment of cytokine-activated astrocytes is necessary. Here, we review studies that promote the thesis that cytokines elicit potent neuroprotective and regenerative responses from astrocytes.