Astrocytes regulate important functions in the brain, and their dysregulation has been linked to the etiology of neurodegenerative diseases, such as Alzheimer's disease (AD). The role of astroglia in human AD remains enigmatic, owing to the limitations of animal models, which, while recreating some pathological aspects of the disease, do not fully mirror its course. In addition, the recognition of major structural and functional differences between human and mouse astrocytes has also prompted research into human glial cells. In the current study, astrocytes were generated using human iPSCs from patients with sporadic Alzheimer's disease (sAD), familial Alzheimer's disease (fAD) and non-demented controls (NDC). All clones gained astrocyte-specific morphological and proteomic characteristics upon in vitro differentiation, without considerable inter-clonal variances. In comparison to NDC, AD astrocytes displayed aberrant calcium dynamics in response to glutamate. When exposed to monomeric and aggregated tau, AD astrocytes demonstrated hypertrophy and elevated GFAP expression, differential expression of select signaling and receptor proteins, and the enhanced production of metalloproteinases (MMPs). Moreover, astrocytic secretomes were able to degrade tau in both monomeric and pathologically aggregated forms, which was mediated by MMP-2 and -9. The capacity to neutralize tau varied considerably between clones, with fAD astrocytes having the lowest degradability relative to sAD and healthy astrocytes. Importantly, when compared to aggregated tau alone, astrocytic secretome pretreatment of tau differentially reduced its detrimental effects on neurons. Our results show crucial differences in sporadic and familial AD astrocytes and suggests that these cells may play distinctive roles in the pathogenesis of early and late onset Alzheimer's disease.