The balance between controlling infection and limiting inflammation is particularly precarious in the brain because of its unique vulnerability to the toxic effects of inflammation. Astrocytes have been implicated as key regulators of neuroinflammation in CNS infections, including infection with Toxoplasma gondii, a protozoan parasite that naturally establishes a chronic CNS infection in mice and humans. In CNS toxoplasmosis, astrocytes are critical to controlling parasite growth. They secrete proinflammatory cytokines and physically encircle parasites. However, the molecular mechanisms used by astrocytes to limit neuroinflammation during toxoplasmic encephalitis have not yet been identified. TGF-β signaling in astrocytes is of particular interest because TGF-β is universally upregulated during CNS infection and serves master regulatory and primarily anti-inflammatory functions. We report in this study that TGF-β signaling is activated in astrocytes during toxoplasmic encephalitis and that inhibition of astrocytic TGF-β signaling increases immune cell infiltration, uncouples proinflammatory cytokine and chemokine production from CNS parasite burden, and increases neuronal injury. Remarkably, we show that the effects of inhibiting astrocytic TGF-β signaling are independent of parasite burden and the ability of GFAP(+) astrocytes to physically encircle parasites.