The glial environment is an important determinant of neuronal health in experimental models of neurodegeneration. Specifically, astrocytes have been shown, dependent on context, to be both injurious and protective. Human pluripotent stem cells offer a powerful new system to improve our understanding of the mechanisms underlying astrocyte-mediated neuroprotection. Here, we describe a human embryonic stem cell (HESC)-based system to assess the scope and mechanism of human astrocyte-mediated neuroprotection. We first report the generation of enriched and functional HESC-derived astrocytes, by combining BMP-mediated Smad and LIF-mediated JAK-STAT signalling. These astrocytes promote the protection of HESC-derived neurons against oxidative insults. Moreover, their neuroprotective capacity can be greatly enhanced by treatment with the nuclear factor-erythroid 2-related factor 2 (Nrf2)-activating triterpenoid 1[2-Cyano-3,12-dioxool-eana-1,9(11)-dien-28-oyl] trifluoroethylamide (CDDO(TFEA)). Activation of the transcription factor Nrf2 in human astrocytes by CDDO(TFEA) treatment induced expression of the glutamate-cysteine ligase (GCL) catalytic subunit, leading to enhanced GCL activity and glutathione production, and strong neuroprotection against H(2)O(2). This enhanced neuroprotection was found to be dependent on astrocytic GCL activity, unlike the basal neuroprotection afforded by untreated astrocytes. Direct treatment of HESC-derived neurons with CDDO(TFEA) elicited no induction of Nrf2 target genes, nor any neuroprotection. Thus, human astrocytes can mediate neuroprotection through glutathione-dependent and glutathione-independent mechanisms, and represent a therapeutic target for human disorders associated with neuronal oxidative stress.