Complications of diabetes affect tissues throughout body, including central nervous system. Epidemiological studies show that diabetic patients have increased risk of depression, anxiety, age-related cognitive decline and Alzheimer's disease. Mice lacking insulin receptor in brain or on hypothalamic neurons display an array of metabolic abnormalities, however, the role of insulin action on astrocytes and neurobehaviors remains less well-studied. Here, we demonstrate that astrocytes are a direct insulin target in the brain and that knockout of IR on astrocytes causes increased anxiety and depressive-like behaviors in mice. This can be reproduced in part by deletion of IR on astrocytes in the nucleus accumbens. At a molecular level, loss of insulin signaling in astrocytes impaired tyrosine phosphorylation of Munc18c. This led to decreased exocytosis of ATP from astrocytes, resulting in decreased purinergic signaling on dopaminergic neurons. These reductions contributed to decreased dopamine release from brain slices. Central administration of ATP analogues could reverse depressive-like behaviors in mice with astrocyte IR knockout. Thus, astrocytic insulin signaling plays an important role in dopaminergic signaling, providing a potential mechanism by which astrocytic insulin action may contribute to increased rates of depression in people with diabetes, obesity and other insulin resistant states.