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Microglia-astrocyte crosstalk has recently been at the forefront of glial research. Emerging evidence illustrates that microglia- and astrocyte-derived signals are the functional determinants for the fates of astrocytes and microglia, respectively. By releasing diverse signaling molecules, both microglia and astrocytes establish autocrine feedback and their bidirectional conversation for a tight reciprocal modulation during central nervous system (CNS) insult or injury. Microglia, the constant sensors of changes in the CNS microenvironment and restorers of tissue homeostasis, not only serve as the primary immune cells of the CNS but also regulate the innate immune functions of astrocytes. Similarly, microglia determine the functions of reactive astrocytes, ranging from neuroprotective to neurotoxic. Conversely, astrocytes through their secreted molecules regulate microglial phenotypes and functions ranging from motility to phagocytosis. Altogether, the microglia-astrocyte crosstalk is fundamental to neuronal functions and dysfunctions. This review discusses the current understanding of the intimate molecular conversation between microglia and astrocytes and outlines its potential implications in CNS health and disease.