Astrocytes strongly promote the formation and maturation of synapses by secreted proteins. Several astrocyte-secreted synaptogenic proteins controlling excitatory synapse development were identified; however, those that induce inhibitory synaptogenesis remain elusive. Here, we identify neurocan as an astrocyte-secreted inhibitory synaptogenic protein. After secretion from astrocytes, neurocan is cleaved into N- and C-terminal fragments. We found that these fragments have distinct localizations in the extracellular matrix. The neurocan C-terminal fragment localizes to synapses and controls cortical inhibitory synapse formation and function. Neurocan knockout mice lacking the whole protein or only its C-terminal synaptogenic domain have reduced inhibitory synapse numbers and function. Through super-resolution microscopy, invivo proximity labeling by secreted TurboID, and astrocyte-specific rescue approaches, we discovered that the synaptogenic domain of neurocan localizes to somatostatin-positive inhibitory synapses and strongly regulates their formation. Together, our results unveil a mechanism through which astrocytes control circuit-specific inhibitory synapse development in the mammalian brain.