Astrocytes are the most abundant cell type in the mammalian brain. Interest in astrocyte function has increased dramatically in recent years because of their newly discovered roles in synapse formation, maturation, efficacy, and plasticity. However, our understanding of astrocyte development has lagged behind that of other brain cell types. We do not know the molecular mechanism by which astrocytes are specified, how they grow to assume their complex morphologies, and how they interact with and sculpt developing neuronal circuits. Recent work has provided a basic understanding of how intrinsic and extrinsic mechanisms govern the production of astrocytes from precursor cells and the generation of astrocyte diversity. Moreover, new studies of astrocyte morphology have revealed that mature astrocytes are extraordinarily complex, interact with many thousands of synapses, and tile with other astrocytes to occupy unique spatial domains in the brain. A major challenge for the field is to understand how astrocytes talk to each other, and to neurons, during development to establish appropriate astrocytic and neuronal network architectures.