Pathological findings in neonatal brain injury associated with preterm birth include focal and/or diffuse white matter injury (WMI). Despite the heterogeneous nature of this condition, reactive astrogliosis and microgliosis are frequently observed. Thus, molecular mechanisms by which glia activation contribute to WMI were investigated. Postmortem brains of neonatal brain injury were investigated to identify molecular features of reactive astrocytes. The contribution of astrogliosis to WMI was further tested in a mouse model in genetically engineered mice. Activated STAT3 signaling in reactive astrocytes was found to be a common feature in postmortem brains of neonatal brain injury. In a mouse model of neonatal WMI, conditional deletion of STAT3 in astrocytes resulted in exacerbated WMI, which was associated with delayed maturation of oligodendrocytes. Mechanistically, the delay occurred in association with overexpression of transforming growth factor (TGF)-1 in microglia, which in healthy controls decreased with myelin maturation in an age-dependent manner. TGF-1 directly and dose-dependently inhibited the maturation of purified oligodendrocyte progenitors, and pharmacological inhibition of TGF-1 signaling in vivo reversed the delay in myelin development. Factors secreted from STAT3-deficient astrocytes promoted elevated TGF-1 production in cultured microglia compared to wild-type astrocytes. These results suggest that myelin development is regulated by a mechanism involving crosstalk between microglia and oligodendrocyte progenitors. Reactive astrocytes may modify this signaling in a STAT3-dependent manner, preventing the pathological expression of TGF-1 in microglia and the impairment of oligodendrocyte maturation.