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font-weight:700;'>Fabp7 KO) mice show behavioral phenotypes reminiscent of human neuropsychiatric disorders such as schizophrenia. However, direct evidence showing how FABP7 deficiency in astrocytes leads to altered brain function is lacking. Here, we examined neuronal dendritic morphology and synaptic plasticity in medial prefrontal cortex (mPFC) of Fabp7 KO mice and in primary cortical neuronal cultures. Golgi staining of cortical pyramidal neurons in Fabp7 KO mice revealed aberrant dendritic morphology and decreased spine density compared with those in wild-type (WT) mice. Aberrant dendritic morphology was also observed in primary cortical neurons co-cultured with FABP7-deficient astrocytes and neurons cultured in Fabp7 KO astrocyte-conditioned medium. Excitatory synapse number was decreased in mPFC of Fabp7 KO mice and in neurons co-cultured with Fabp7 KO astrocytes. Accordingly, whole-cell voltage-clamp recording in brain slices from pyramidal cells in the mPFC showed that both amplitude and frequency of action potential-independent miniature excitatory postsynaptic currents (mEPSCs) were decreased in Fabp7 KO mice. Moreover, transplantation of WT astrocytes into the mPFC of Fabp7 KO mice partially attenuated behavioral impairments. Collectively, these results suggest that astrocytic FABP7 is important for dendritic arbor growth, neuronal excitatory synapse formation, and synaptic transmission, and provide new insights linking FABP7, lipid homeostasis, and neuropsychiatric disorders, leading to novel therapeutic interventions. GLIA 2016;64:48-62.