Increasing evidence for a direct contribution of astrocytes as well as different apolipoprotein (APOE) variants to Alzheimer’s disease (AD) main pathological hallmarks comes from cellular and molecular studies in rodent models. Yet these models cannot fully mimic how human astrocytes affect AD pathology as human and rodent astrocytes differ considerably in morphology, functionality and gene expression. To address these challenges, we have established an approach to study human astrocytes carrying APOE3 and APOE4 isoforms within an AD brain environment by transplanting human induced pluripotent stem cell (hiPSC)-derived astrocyte progenitors into neonatal brains of suitable AD model mice. We found that APOE3 and APOE4 transplanted cells similarly differentiate into astrocytes within the mouse host brain and very often integrate in upper layers of one cortical hemisphere. Interestingly, in AD model mice APOE3 and APOE4 astrocytes differentially express and secrete the apoE protein and differentially affect main pathological hallmarks associated to AD.