Although astrocytes are involved in the production of an inhibitory glial scar following injury, they are also capable of providing neuroprotection and supporting axonal growth. There is growing appreciation for a diverse and dynamic population of astrocytes, specified by a variety of glial precursors, whose function is regulated regionally and temporally. Consequently, the therapeutic application of glial precursors and astrocytes by effective transplantation protocols requires a better understanding of their phenotypic and functional properties and effective protocols for their preparation. We present a systematic analysis of astrocyte differentiation using multiple preparations of glial-restricted precursors (GRP), evaluating their morphological and phenotypic properties following treatment with fetal bovine serum (FBS), bone morphogenetic protein 4 (BMP-4), or ciliary neurotrophic factor (CNTF) in comparison to controls treated with basic fibroblast growth factor (bFGF), which maintains undifferentiated GRP. We found that treatments with FBS or BMP-4 generated similar profiles of highly differentiated astrocytes that were A2B5-/GFAP+. Treatment with FBS generated the most mature astrocytes, with a distinct and near-homogeneous morphology of fibroblast-like flat cells, whereas BMP-4 derived astrocytes had a stellate, but heterogeneous morphology. Treatment with CNTF induced differentiation of GRP to an intermediate state of GFAP+cells that maintained immature markers and had relatively long processes. Furthermore, astrocytes generated by BMP-4 or CNTF showed considerable experimental plasticity, and their morphology and phenotypes could be reversed with complementary treatments along a wide range of mature-immature states. Importantly, when GRP or GRP treated with BMP-4 or CNTF were transplanted acutely into a dorsal column lesion of the spinal cord, cells from all 3 groups survived and generated permissive astrocytes that supported axon growth and regeneration of host sensory axons into, but not out of the lesion. Our study underscores the dynamic nature of astrocytes prepared from GRP and their permissive properties, and suggest that future therapeutic applications in restoring connectivity following CNS injury are likely to require a combination of treatments.