Astrocytes are the most abundant glial cells in the central nervous system (CNS) and participate in synaptic, circuit, and behavioral functions. The well‐developed protoplasmic astrocytes contain numerous processes forming well‐delineated bushy territories that overlap by as little as 5% at their boundaries. This highly complex morphology, with up to approximately 80% of the cell's membrane constituted by fine processes with dimensions on the tens of nanometer scale and high surface area to volume ratios, comes in contact with synapses, blood vessels, and other glial cells. Recent progress is challenging the conventional view that astrocytes are morphologically homogeneous throughout the brain; instead, they display circuit‐ and region‐specific morphological diversity that may contribute to the heterogeneous astrocyte‐neuron spatiotemporal interplay in different brain areas. Further, the fine structure of astrocytes is found to be highly plastic and activity‐dependent. We are beginning to understand how astrocyte structural plasticity contributes to brain functions. The change/loss of astrocyte morphology, traditionally known as a hallmark for reactive astrogliosis, is a common pathological feature in many neurological disorders. However, recent data suggest the fine structural deficits preceding reactive astrogliosis may drive disease progression. This review summarizes recent advances in astrocyte morphological diversity, plasticity, and disease‐related deficits.