Astrocytes are instrumental to major brain functions, including metabolic support, extracellular ion regulation, the shaping of excitatory signaling events and maintenance of synaptic glutamate homeostasis. Astrocyte dysfunction contributes to numerous developmental, psychiatric and neurodegenerative disorders. The generation of adult human fibroblast-derived induced pluripotent stem cells (iPSCs) has provided novel opportunities to study mechanisms of astrocyte dysfunction in human-derived cells. To overcome the difficulties of cell type heterogeneity during the differentiation process from iPSCs to astroglial cells (iPS astrocytes), we generated homogenous populations of iPS astrocytes using zinc-finger nuclease (ZFN) technology. Enhanced green fluorescent protein (eGFP) driven by the astrocyte-specific glial fibrillary acidic protein (GFAP) promoter was inserted into the safe harbor adeno-associated virus integration site 1 (AAVS1) locus in disease and control-derived iPSCs. Astrocyte populations were enriched using Fluorescence Activated Cell Sorting (FACS) and after enrichment more than 99% of iPS astrocytes expressed mature astrocyte markers including GFAP, S100, NFIA and ALDH1L1. In addition, mature pure GFP-iPS astrocytes exhibited a well-described functional astrocytic activity in vitro characterized by neuron-dependent regulation of glutamate transporters to regulate extracellular glutamate concentrations. Engraftment of GFP-iPS astrocytes into rat spinal cord grey matter confirmed in vivo cell survival and continued astrocytic maturation. In conclusion, the generation of GFAP::GFP-iPS astrocytes provides a powerful in vitro and in vivo tool for studying astrocyte biology and astrocyte-driven disease pathogenesis and therapy.