Astrocytes play critical roles in brain development and disease, but the mechanisms that regulate astrocyte proliferation are poorly understood. We report that astrocyte proliferation is bi-directionally regulated by neuronal activity via NMDA receptor (NMDAR) signaling in neurons. Prolonged treatment with an NMDAR antagonist reduced expression of cell-cycle-related genes in astrocytes in hippocampal cultures and suppressed astrocyte proliferation in vitro and in vivo, whereas neuronal activation promoted astrocyte proliferation, dependent on neuronal NMDARs. Expression of prostaglandin-endoperoxide synthase 2 (Ptgs2) is induced specifically in neurons by NMDAR activation and is required for activity-dependent astrocyte proliferation through its product, prostaglandin E2 (PGE2). NMDAR inhibition or Ptgs2 genetic ablation in mice reduced the proliferation of astrocytes and microglia induced by mild traumatic brain injury in the absence of secondary excitotoxicity-induced neuronal death. Our study defines an NMDAR-mediated signaling mechanism that allows trans-cellular control of glial proliferation by neurons in brain development and injury.