Despite extensive astrocyte activation in patients suffering from HIV-associated neurocognitive disorders (HAND), little is known about the contribution of astrocytes to HAND neuropathology. Here, we report that the robust activation of neurotoxic astrocytes (A1 astrocytes) in the CNS promotes neuron damage and cognitive deficits in HIV-1 gp120 transgenic mice. Notably, knockout of α7 nicotinic acetylcholine receptors (α7nAChR) blunted A1 astrocyte responses, ultimately facilitating neuronal and cognitive improvement in the gp120tg mice. Furthermore, we provide evidence that Kynurenic acid (KYNA), a tryptophan metabolite with α7nAChR inhibitory properties, attenuates gp120-induced A1 astrocyte formation through the blockade of α7nAChR/JAK2/STAT3 signaling activation. Meanwhile, compared with gp120tg mice, mice fed with tryptophan showed dramatic improvement in cognitive performance, which was related to the inhibition of A1 astrocyte responses. These initial and determinant findings mark a turning point in our understanding of the role of α7nAChR in gp120-mediated A1 astrocyte activation, opening up new opportunities to control neurotoxic astrocyte generation through KYNA and tryptophan administration.