Neuronal remodeling in response to deafferenting lesions in the brain can be enhanced by estradiol (E2). Astrocytes are among the targets of E2 in complex interactions with neurons and may support or inhibit neuronal remodeling. In ovariectomized female rats given entorhinal cortex lesions, E2 replacement inhibited the increase of glial fibrillary acidic protein (GFAP) protein. To model the role of E2 in these complex processes, we used the “wounding-in-a-dish” of astrocyte-neuron cocultures. Low physiological E2 (1 pm) blocks the wound-induced increase of GFAP expression (transcription and protein) and enhances neurite outgrowth. The transcriptional responses to E2 during wounding are mediated by sequences in the 5′-upstream region of the rat GFAP promoter. Concurrently, E2 reorganized astrocytic laminin into extracellular fibrillar arrays, which others have shown support neurite outgrowth. The inhibition of GFAP expression by E2 in this model is consistent with in vivo findings that E2 enhanced recovery from deafferenting cortical lesions by increased neurite outgrowth in association with decreased GFAP expression. More generally, we hypothesize that physiological variations in E2 levels modulate neuronal plasticity through direct effects on GFAP transcription that, in turn, modify GFAP-containing intermediate filaments and reorganize astrocytic laminin.